by Vikita Poindexter, SPHR
Paid-time-off banks, as opposed to sick leave banks, are becoming increasingly popular among employers, as they tend to boost employee job satisfaction while reducing unscheduled and unexpected leaves of absence. That sounds great, right?
Well, it can be—if your PTO policy is designed and implemented correctly. In addition to giving employees paid time off for things like voting, illness, vacation, and personal time, there are other factors you must consider, such as wage and hour laws, workers’ comp regulations, and the ADA. The complexity of these laws—and their relationship with PTO—makes it crucial for you to know where your policies are potentially dangerous.
You’ll probably never settle an employee lawsuit over use-it-or-lose-it paid time off for $10.5 million, like courier DHL did. Or pay $11 million, like Kelly Services, over shorted vacation pay. Such settlements make AutoNation’s $2.35 million PTO settlement with employees seem cheap by comparison. But make no mistake—PTO administration errors can lead to huge headaches for any employer.
• The difference between PTO and traditional sick and vacation banks
• Best practices for developing your PTO policy and what design elements good plans share
• Must-have language to include in your PTO policy, and why a “use-it-or-lose it” PTO policy might not be your best bet
• How FMLA interacts with PTO policies, including how to calculate leave time when PTO is used concurrently with FMLA leave
• Practical considerations to take into account when employees are taking PTO and intermittent FMLA leave, including how to track time off and more
• PTO concerns that arise for employees covered under the ADA, workers’ comp law, or short-term disability
• Tips for managing your organization’s PTO program on a day-to-day basis, including the proper way to calculate unused PTO days, when to dock exempt employees’ pay, and carryover and PTO compensation obligations when the employment relationship is terminated
Vikita Poindexter, SPHR, is the CEO of Poindexter Consulting Group, Inc.in Temecula.