We all need a little break now and then. That is why vacation time is such a popular employment benefit. Through the years, sick and personal days came to be added to vacation benefits. Sadly, we regularly speak with agency principals battling with employees over vacation time, sick days and personal days. In recent years, a new trend has emerged, “Paid Time Off,” or PTO. This involves rolling all paid days off into one package, to be used per employee discretion (with some restrictions).
Let’s be clear here—we are speaking only about vacation time, sick days and personal days. Compensatory or “comp” time is a whole ’nother discussion, although it may factor into PTO policy for some of our members, depending on how and when comp time can be used.
Several Second Wind members engaged in a discussion of this issue in Member Forums. They shared many useful suggestions and examples of agency policy.
The original post read:
A few years ago, we consolidated sick days and personal days and just called them personal days (eight per year).
We tried to give concrete examples of what constitutes a personal day: personal illness or illness of a family member; attending a funeral; car trouble that requires you to be away from the office for an extended amount of time; court appearances; child's school-related activities or doctor's appointments that you expect to take more than two hours.
Despite [our efforts] to be pretty specific, it seems that people are taking advantage, so we wanted to expand the list to try to cover more bases. Can you please tell me how you define a personal day and what are acceptable excuses for them?
The Crux of the Criticism
The consensus of opinion among respondents was that the agency principal was too specific in limiting use of personal days. Her attempts to control employee use of personal days could be construed as an attempt to control employee behavior outside of the office, and was perhaps instigating the very behavior she was trying to control. As one principal said, “You end up with people trying to work the system to get those personal days.” This arises partly from the fact that not everyone needs personal days (per the traditional description, as days for personal emergencies), so some employees may benefit from having them, while others will feel short-changed. This is why the all-in-one PTO policy became popular. Everyone gets the same number of days based on length of time with the agency, but can use them as they choose, for vacation, sick days or personal days.
Test These Four Approaches
Our agency principal received recommendations for several approaches to resolving the problem of employee abuse of PTO.
1. Restrict when and how often personal days can be used: i.e., she might set a limit for the number of days allowed within a pay period, and require that employees take days in half or full-day increments (not by the hour). She might also require that no more than one day could be added to a scheduled vacation week, and that, if critical work is on the schedule, only personal days that are emergencies (family bereavements, illnesses or accidents) would be allowed.
2. Do not try to designate how the days can be used. Personal and sick days are a benefit, and the more you restrict their use, the less beneficial they seem to your employees. Instead, track the PTO awarded to each employee, and dock their pay if they exceed the designated amount per pay period. One respondent said this: "I have observed that as soon as they experience their pay being deducted, they are a lot more mature about the ways they use their personal time."
3. Reward non-use of sick days by paying employees for a set number of unused days at year-end. Typically, agencies who use such a policy pay employees for three to five unused sick days. "Since I've instituted this, I've paid out unused sick days every single year," reported one principal.
4. Finally, for a true PTO policy, our principal should roll vacation time together with personal and sick days, for employees to use as they see fit. In such cases, restrictions might include a required two weeks notice for taking more than three days of paid time off at a time; a restriction on the number if people within a particular department who can be on vacation at one time; and a limit on the number of paid days off employees can take without prior approval from a supervisor.
Paid time off is a terrific benefit to your employees. It provides flexibility employees may use regardless of lifestyle, age group or religious background. It is a policy that can be fairly applied to all employees. And stepping back from excessive restrictions implies that the employer trusts the employee to treat the benefit responsibly and in an adult manner. We are all grownups. Figuring out how to deal with PTO shouldn’t be this much of a headache!
Two “Cons” You Should Check Out
How PTO works with extended leaves of absence is one big concern for many employers. If your agency falls within the Family and Medical Leave Act (FMLA) requirements, talk to an employment law specialist about correctly wording policies to cover leaves vs. regular paid time off. Also, be aware of state-specific employment laws; some states consider vacation and sick days as wages and set restrictions on how businesses can handle these benefits.
Managing Abuse of PTO
If a standard PTO policy (with minimal restrictions) does not avert employee abuse of the benefit, there may be other factors at work. These will need to be addressed one-on-one with the employee in question. Find out if an excess of sick days may be due to a too-heavy workload (which can be adjusted by reassigning responsibilities or looking for extra help); personal problems outside the office which could benefit from counseling or intervention; or family situations adding stress and demanding time of the employee.
Try not to assume that an employee is lazy or a slacker. There is almost always a reason for individual behavior—from the individual’s perspective. Your agency culture may deter people from voicing concerns or complaints, encouraging sore points to fester and affecting job performance. It is the agency principal’s job to identify the problem, get to its root and devise a solution. Remember that the goal is to keep valuable employees. You cannot afford to replace or retrain people every time an HR issue comes up.
Have a system in place for working through behavioral problems or policy violations, with a probationary period for correcting behavior if the problem is severe. Only after attempting to correct unacceptable behavior should you consider termination. This system also creates a paper trail in the employee’s personnel file in case behavior does not improve. This will legally protect your agency from wrongful termination suits, and should help prevent employee behavioral problems from becoming chronic.
