Vacation Benefits 101
Time-off benefits offered by employers can be one of the most important ingredients in an employee compensation package. The types of Paid Time Off (PTO) employers can offer include: holidays, vacations, sick leave, personal leave, and bereavement leave, discussed below. These types of time-off benefits can be a very valuable part of an employee benefit package, become an attraction for recruitment and also a perk for longevity.
Sick Leave and Personal Time
Generally, paid sick leave benefits and personal time off are not required by law. Unpaid “sick” leave, however, may be legally required if you are subject to either federal or state Family Medical Leave laws. However, sick and personal leave, like other time-off benefits, is valuable to employees and can create a robust package of benefits that makes employees feel valued.
If an employer decides to give employees paid sick time, generally the amount of PTO offered is entirely up to the employer. It is a good policy to set a limit on the amount of time for which an employee can be compensated.
Another time-off benefit that employers can offer is personal time. Personal time is offered to employees to cover situations that are not included in sick leave, bereavement, or other policies.
Would it surprise you to know employers are not legally required to give employees days off for federal or state holidays? In fact, if you need to, you can require that employees work on Christmas Day, Thanksgiving Day, or any other traditional holiday due to business necessity.
In addition, there are no laws requiring employers to provide employees with funeral or bereavement leave. The employers who do provide this type of leave usually allow between two and four days per funeral or a maximum allowance of two to four days per calendar year, either as paid or unpaid leave.
Having said all that, as an employer are you ready to track, manage, and set up policies for all that PTO you plan to offer your employees? First, you’ll need to establish a quality PTO policy in your employee handbook and inform employees of the policy, the effective date and how to request PTO. Next, make sure you are not discriminating against any particular class of worker. Remember, you are not required by law to offer PTO to employees, but if you choose to, you are held to the same compliance standards as Equal Opportunity Employment, Fair Labor Standards Act and more. Lastly, you’ll need to track the PTO, based on the policy you’ve established.
An alternative to managing PTO and other policies yourself is working with a Professional Employer Organization, or PEO. An HR Manager will assist you in crafting appropriate, compliant PTO polices, and a payroll specialist will set up the appropriate tracking in the PEO’s payroll system. Once setup is complete, you’ll simply notify the PEO when an employee takes time off and under which policy. Employees will be able to see their available PTO balances on their pay stubs or via an online portal.
It is better to have a team of experts on your side assisting with compliance and PTO tracking. If you do not have a solid policy, or a system in place to track PTO, employees could argue they are not getting what was promised in their compensation package. Employees could even file Department of Labor complaints or contact labor attorneys to file for unpaid wages if a policy was not followed, or was poorly written/unclear, causing them not to be properly compensated, based on the written policy. It’s always best to have a detailed PTO policy in writing, track it thoroughly and have a team of credentialed experts to assist you.
Contact the author directly at email@example.com. This is the twentieth post in our 30 Days of HR Outsourcing series. Visit us each day in November for information on HR, payroll, benefits, workers’ comp and risk management topics, or subscribe to be notified instantly when a new post is published.