2. CREATE A PLAN TO REVAMP YOUR PTO PROGRAM There’s no one-size-fits-all PTO plan, and your policies will depend on the unique needs of your business. However, as you consider updating and modernizing your program, you can start by asking yourself the following questions: • How do your PTO policies stack up against offerings from your competitors and other businesses in your area? • Are you providing enough time off each year for employees to disconnect as needed? • Do you have an adequate system for tracking and approving PTO use? • Do you have clear procedures for handling requests at popular times or during your busy season? • Have you asked employees for feedback about their experience requesting or using PTO? • Have you identified any patterns of underuse organization-wide or in particular departments? • Do you have a legally compliant cap on accrual of paid time off or a legally compliant PTO policy? • Do your policies comply with all applicable federal, state and local leave laws? 3. CONSIDER DIFFERENT TYPES OF PTO MODELS To embrace loud vacationing, you may need to think outside the box. But first, let’s talk about unlimited PTO models, which have become popular in recent years. Under these plans, employees don’t have a set number of PTO days, accruals or caps. Instead, they request paid time off as needed or desired, and managers use their discretion to approve or deny such requests. These policies place no cap on the amount of time an employee can take off. The benefits of an unlimited PTO policy include: • More flexibility for employees to take the time they need, when they need it, rather than waiting for PTO to accrue. • May be a good recruiting and retention tool, as it promotes autonomy over the employees’ own work-life balance. • May avoid employee burnout. • Reduced administrative costs for employers in tracking PTO. • Cost savings, as in some states there is no need to pay out unused PTO days at the end of the employment relationship if the employer truly has an unlimited PTO policy. But watch out for these potential pitfalls of unlimited PTO policies: • You may have employees who prefer to “earn” accruals rather than use their discretion in taking time off. • Some employees may request less time than they need, while others may request excessive time off. • Managers may not apply and enforce policies consistently, which could lower morale or lead to discrimination claims. • Although the purpose of a vacation allowance is to encourage employees to disconnect and recharge, they may be frustrated if they can’t cash out unused vacation time upon separation — especially if your old policy allowed it or state law requires you to pay out accrued vacation at termination. • Combining vacation and sick time off may run afoul of various state and local sick leave laws. Some states may still classify unlimited PTO as “earned wages” depending on how the policy is structured and applied — so check with your attorney on the legal nuances for your locations. For example, scan the QR code to read about California-specific issues. https://www.fisherphillips.com/en/news-insights/unlimited-ptogreat-resignation-concerns-practical-tips-policy.html To address some of the concerns with unlimited vacation programs, some employers are setting “minimum PTO” or “mandatory vacation” policies — meaning they require employees to take at least a certain amount of time off a year. The benefits of this type of policy include: • Helping prevent burnout and encouraging better work-life balance by ensuring employees take breaks from work. • Helping managers plan for absences and schedule work assignments accordingly. • May be a good recruiting and retention tool. • You can be flexible in your approach. For example, an unlimited policy can be combined with a minimum requirement to reap the benefits of an unlimited PTO plan and address some of the pitfalls (like the fear of taking time off that’s not “earned”). You can also combine minimum PTO with accruals or other policies that provide a set number of earned vacation time per year to avoid high cash-outs or rollovers at the end of the year if offered by your company or required in your jurisdiction. However, be vigilant of state-specific requirements, such as California-specific issues relating to accrual caps and payment of PTO at separation. • You can still award employees with extra time off based on tenure, for example, by raising the minimum for employees with seniority. A word of caution: You’ll want to ensure your written policy is developed and implemented carefully so that the minimum doesn’t unintentionally become the maximum. We’ll discuss corporate culture in more detail next. 4. WORK WITH EMPLOYEES TO REDUCE ANXIETY According to Glassdoor’s research, 77% of employees feel anxious about the workload they’ll face when they return from vacation. You can help assuage their fears by: • Scheduling a 1:1 meeting prior to their vacation to go over any projects or tasks that will need to be reassigned to other employees during their absence. • Encouraging them to truly disconnect while on vacation and reassuring them that you have an adequate work-coverage plan in place. • Following up when they return to work to help prioritize tasks and manage their workload. • Offering words of encouragement to enjoy their time off and welcoming them back when they return. 20 SAN DIEGO DEALER
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