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A PTO policy could make administration easier, less contentious

It can be a real hassle to keep track of which employees have used how much of their vacation days, floating holidays, personal days, charitable time and sick leave, especially when their days continue to accrue throughout the year. You might invest in some costly software or have routine audits performed, but there could be an easier way. And for once the easier way might also be the better way.

The idea is to put all paid employee leave into one category, paid time off or "PTO." "You're saying to staffers, it's PTO, just take it. If you have a sick kid, need a personal day, you're really stressed out," said a spokesperson for one HR consulting firm.

In 2016, 43 percent of U.S. companies offered PTO policies, up substantially from just 28 percent in 2002. One of the biggest benefits is administrative: No one needs to keep track of which kind of paid leave has been used by each employee. Also, a growing number of municipalities and states are requiring employers to be transparent about how sick time accrues. PTO policies eliminate the need for such tracking.

Issues with PTO and possible solutions

PTO can offer enormous administrative benefits, but it's not a cure-all for all employee issues with paid leave. For example, you may have employees who show a pattern of taking Mondays off, or extra days surrounding holiday weekends. This may be innocent, or it could show a pattern of excessive drinking on weekends.

When you suspect an employee is abusing sick days, you still need to take action whether you're calling it "sick leave" or "PTO." It's in your company's best interest to be sympathetic, to offer help if needed, and to be firm about your policies.

Another issue that arises is employees running out of time. Here, consistency is very important. You may be tempted to dock the pay of underperforming workers yet look the other way for highly valued ones. Inconsistency in your policies, however, can become contentious if one of those "underperforming" workers sues you for discrimination.

When workers run out of PTO yet get sick, you may have a number of different options. If they're not too sick, you could encourage them to work from home until they get better. Or, you might allow them to borrow some PTO from the upcoming accrual period.

The idea is that PTO policies can be pretty creative. When done thoughtfully and lawfully, a PTO policy can save on administration while offering your workers flexibility. If you have questions about the benefits and risks of a particular policy, we encourage you to reach out to an employment law attorney.

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