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Post-Pandemic PTO: Proceed with Compliance

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As COVID-19 restrictions are relaxed nationwide and small- and medium-sized business (SMB) leaders bring staff back to in-person work, many employees will be ready to finally take advantage of any unused paid time off (PTO) they have accrued over the last year. However, SMB employers must make sure PTO policies and administration comply with federal and local regulations. Oversights can cause trouble down the line in the event of an audit or dispute.

Dominique Thomas, Senior Director of HR Training and Compliance at ExtensisHR, has some valuable suggestions to ensure your company’s PTO policies are compliant.

Clearly define PTO policies

Now is the time to revise your existing company policies to be more explicit about the types of time off available to employees. Examples of PTO include sick days, bereavement, vacation, and personal use days.

Keep in mind certain types of PTO are subject to specific legislative policies. For example, some states permit a “use it or lose it” policy for general PTO. However, sick leave may be exempt in your location. Therefore, if your company’s sick leave is rolled into a general PTO policy, it’s still important to correctly categorize the time-off request.

As another example, some jurisdictions (like the state of New York and the city of Philadelphia) have implemented “sick and safe leave” policies in which employers are mandated to offer job-protected time off to care for a family member, including doctor appointments, etc. Therefore, if your company’s sick leave is rolled into a general PTO policy, it’s still important to correctly categorize the time-off request to comply with local requirements. Check with your HR Manager to determine if sick and safe leave policies apply in your area.

Some COVID-specific PTO policies are still in place at the federal level, such as taking time off to care for a family member with COVID-19 and time off for vaccinations. Though these are temporary measures, until they are explicitly lifted, employees may be entitled to this paid time off.

Once you update your existing PTO policies to be more explicit, consult with your HR Manager to ensure your employees are informed of how to appropriately use their available time off and any company requirements to appropriately request time off.

Work with your HR solutions provider to amend your existing PTO policies to detail specific types of time off. Your HR Manager will help you add additional sub-categories and develop a plan to inform your employees of the type of PTO available to them.

Encourage staff to use their PTO

Paid time off provides staff a chance to rest, relax, and recharge. It’s an important aspect of employee satisfaction. However, disruptions to the workplace and the shift to remote work have caused many employees to forego taking earned PTO over the past year. As a result, many employees may be feeling burned out.

Urge your employees to take advantage of the paid time off available to them by proactively encouraging the use of PTO and individually reminding them how much time off they have available. Letting employees know company leadership supports their decision to take advantage of their PTO may prompt some hesitant employees to take this valuable time for themselves.

Set parameters to control the rush

As we head into the summertime (with the holidays following a few short months later), many employees may be eager to use PTO. This can cause disruptions to your workforce if a significant number of employees are out of the office at the same time.

Employers must make good on the PTO outlined in the employees’ benefits package–and abrupt changes to your policies may not go over well. To control the rush, employers may institute certain blackout days or place restrictions on the number of consecutive days an employee may take off under the company’s paid time off plan.

Some employees might have accrued a significant amount of PTO they are uninterested in using or would cause disruption to the company’s workflow if used all at once. Consult with your HR solutions provider to implement alternatives to days off, such as a voluntary buyout at the end of the year or a cap on accrual. These policies may seem straightforward, but time allocation can get complicated (ex. overtime rules for hourly employees, etc.), so it’s important to work with an experienced HR solutions partner to ensure your policies meet all state and federal regulations. 

As always, policies must be fair and equitable. PTO rules must be administered evenly across staff and never favor–deliberately or inadvertently–employees of any specific race, gender, age, or lifestyle. The experts at your HR solutions provider can review your policy administration to ensure all company rules are applied fairly.

Offer creative PTO options

In addition to legislation-mandated PTO and other general company policies, consider implementing new ideas for paid time off to encourage work/life balance. These benefits must be voluntary and applied equitably across all staff. Here are some suggestions:

  • “Volunteer day” – Full- or half-day PTO for employees to volunteer at their chosen local charity.
  • “Late start morning” – Two hours PTO in the morning to enjoy a leisurely morning commute.
  • “Early afternoon” – Two hours PTO at the end of a workday to enjoy a relaxed commute home.
  • “Birthday day off” – A full paid day off on the employee’s birthday (offer a paid workday if the employee’s birthday falls on a non-workday).

Solicit employee input

Before you make any adjustments to your PTO policies, test your organization’s tolerance for change.

Some employees may experience a kneejerk reaction to any PTO policy changes, even improvements. If employees feel their input is welcome in the decision-making process, it increases the chance of a positive response to change.

Ask employees which types of PTO policies are meaningful to them. Use their feedback to guide decisions on how you restructure. Your HR solutions partner can help develop easy ways of measuring staff response to help you determine which benefits will resonate.

Document everything

Protecting your company against compliance violations depends on your ability to produce appropriate documentation in the event of an audit, employee complaint, or lawsuit. The more detailed your documentation, the better. Classifying types of employee PTO, reviewing the fairness of policy administration, and obtaining employee signatures on updated time-off policies will help protect your organization in the event of a dispute.

Use top-tier technology

Use of digital spreadsheets and email chains to track employee PTO wastes time and risks unnecessary liability exposure. Your Human Resources Information System (HRIS) can help. Today’s cutting-edge HRIS solutions include PTO tracking and the ability to classify many types of time off. Generating detailed reports also helps SMB leadership understand key trends to assist in workforce planning.

Embrace the future

Now is the perfect time to review your existing PTO policies and apply learnings from the past year. Chances are your entire organization and workforce have shifted in profound ways–hopefully for the better. Don’t evaluate your PTO policies in a silo. Look at everything in context with how your policies reflect your productivity, recruitment, and retention goals.

PTO is a valuable benefit most employees covet. By taking a careful approach, using modern technology, and working closely with HR experts, you can develop innovative, attractive PTO policies without jeopardizing your compliance.

Is it time to review your PTO policies? Our HR experts are here to help.

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