Summer is just around the corner and some of your employees may be thinking of relaxing vacation days ahead. Major corporations like Netflix, Roku, and Grubhub offer what’s called unlimited PTO, or unlimited paid time off. Organizations that offer this “policy-that-isn’t” are making headlines across the globe for their progressive stance on employee vacation time. If you are considering reevaluating your organization’s PTO policy, keep reading for a few helpful tips from the professionals a Prescott HR.
What is PTO?
Before we begin, it’s helpful to understand what PTO is and how it works within different organizations. PTO stands for paid-time-off and is a benefit typically offered to full-time employees. There are several options available to employers when establishing a PTO policy, including:
- Accrual PTO: This is when employees accrue a certain number of PTO days over time. For example, an employee can earn one PTO day per month, totaling 12 PTO days by the end of a calendar year. This is a beneficial PTO policy if your organization experiences high turnover. One downside to accrual PTO is that it requires attention to detail by your admin staff to keep track of days accrued per employee.
- Frontload PTO: Frontload PTO can alleviate the burden on your administrative staff by blanket approving a full year’s worth of PTO at the beginning of each year. One downside to this kind of policy is that you have to be prepared for your employee, or employees, to take their full PTO time right away.
- Unlimited PTO: Unlimited PTO is a growing trend in the working world. Some companies, like Netflix, believe that employees can be trusted to manage their time properly to get the job done- which does not require monitoring set hours. Unlimited PTO policies are not right for every business, but the conversation has definitely been brought to the forefront in recent years as companies try to retain top talent.
The Benefits of Healthy PTO Policies
Your organization may want to consider restructuring its PTO policy to keep up with today’s competitive hiring market. Some benefits of offering healthy or generous PTO policies include:
- Better work-life balance
- Improved employee morale
- Prevent employee burnout
- Attract and hire top talent
- Can lead to more productive employees
What does the law say about PTO?
Laws vary from state to state, but generally speaking, an organization is required to uphold the Fair Labor Standards Act (FLSA). Technically the FLSA does not require payment for time not worked, but there are separate provisions for employers in different industries. Some states even require PTO for certain circumstances, like in California where employers are required to provide at least 24 hours of paid sick leave per year.
Work with Prescott HR
Is it time to evaluate your organization’s PTO policy? Prescott HR wants to help! Our unintimated HR practices allow us to be focused and effective, providing your business with exactly what you need. Give us a call today at 443-351-8818 or contact us online.