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Your Company May Benefit from a PTO Bank Toll Free: 877.880.4477 Phone: 281.880.6525 www.hrp.net

Your Company May Benefit from a PTO Bank

Toll Free: 877.880.4477

Phone: 281.880.6525

WorldatWork, the HR professional society, has been surveying its members

for over a decade on this topic. In its most recent "Paid Time off Programs and

Practices" report, within some demographic groups, a majority of employers

now merge those paid time off (PTO) components. That creates a "combined

bucket of available days to be used by employees … at their own discretion."

One benefit of this approach is that employers are no longer put in a position

to have to judge whether leave is used appropriately.

Specifically, 51% of privately held companies have jumped on the PTO bank

train. In the health care and "social assistance" industry sector, 79% of those

surveyed have embraced this plan. In contrast, just over one-third of

manufacturers are using PTO banks, so far.

Use of PTO banks also varies considerably by employer size. Here's an

overview.

Among employers having fewer than 100 workers, about 59% use PTO

banks.

For employers in general, about half use PTO banks. This takes in all sizes

of companies, except one.

In that one category, defined as 10,000 to 19,000 employees, more than

two-thirds use PTO banks.

Growing Prevalence Overall the choice to use this method of distributing paid time off is

Growing Prevalence

Overall the choice to use this method of distributing paid time off is growing. A decade ago, only one in three companies used it, while today the overall

figure is 43%. Of those surveyed more than one in four are at least considering

a move to this system.

overall figure is 43%. Of those surveyed more than one in four are at least considering

Here are the primary motivations for the employers that have already made

the switch, and how frequently they were identified, according to the survey:

1.

Greater flexibility for employees (63%),

2.

Ease of administration (55%),

3.

The ability to stay competitive with other companies (29%),

4.

Reduced absenteeism (23%),

5.

Improved employee morale (22%), and

6.

Increased cost effectiveness (20%).

Although reducing absenteeism ranked fourth on that list, it's noteworthy that

41% of survey respondents reported reduced absenteeism after a PTO

program was adopted. That led researchers to believe the drop in

absenteeism might be most dramatic right after the program was

implemented.

Also noteworthy in the survey is the fact that employers using PTO banks, on

average, give employees fewer total paid days off, than those that set

individual limits for vacation, sick leave and personal days. As with traditional

vacation policies, PTO bank policies allow more paid days off as employee

tenure increases. The accompanying table tells the story.

Average Number of Days Off by Paid Time Off Policy

Traditional

PTO Bank

< 1 year of service

20

16

1-2 years of service

23

17

3-4 years of service

24

18

5-6 years of service

28

22

7-8 years of service

28

22

9-10 years of service

29

23

11-15 years of service

32

25

16-19 years of service

34

26

20+ years of service

37

27

Source: 2016 WorldatWork Paid Time Off Programs and Practices Survey

Few employers vary their paid time off policies by employee rank, job

classification, worksite or department.

Additional PTO Uses A handful of employers with PTO bank policies expect workers to use

Additional PTO Uses

A handful of employers with PTO bank policies expect workers to use their

PTO allotments for certain purposes beyond vacation, personal days and sick

days. Examples include:

Generally recognized federal and state holidays

Bereavement

Jury duty

On the other hand, a large number of companies that use PTO banks expect employees to use their paid time off hours for parental leave and to do volunteer or community work.

Nearly one-fifth of employers offer family leave benefits that are more

generous than that required by the Family and Medical Leave Act (FMLA) and

local laws (if applicable). Some do so by keeping such employees on the

payroll when they aren't required to do so. Common "beyond FMLA" family

leave benefits include offering:

A longer duration of job-protected leave,

Leave for "a broader set of new-parent circumstances" than required by

law, and

Leave with fewer administrative and documentation requirements.

Who's Eligible? Employers with those more-generous-than-required time off policies for new parents generally did not

Who's Eligible?

Employers with those more-generous-than-required time off policies for new

parents generally did not distinguish between benefits for mothers, fathers or

adoptive parents. Nearly three-fourths also offered them to domestic partners

of parents, and about half did so for foster parents.

Whether a PTO bank policy is appropriate for your organization will depend on

your employee demographics, human resource philosophy and how you feel

about policing the reasons why employees miss work.

A first step in examining whether instituting such a policy makes sense

assuming you haven't already done so might be comparing your total

average employee days away from work to the average PTO allowances (by

employee tenure) revealed in the WorldatWork survey. If the number is

higher, and you don't have an unusually unhealthy workforce, it might be a

good idea to give the PTO bank concept a careful look.

14550 Torrey Chase Blvd., Ste. 360 Houston, TX 77014 USA Toll Free : 877.880.4477 Phone

14550 Torrey Chase Blvd., Ste. 360 Houston, TX 77014 USA

Toll Free

:

877.880.4477

Phone

:

281.880.6525

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:

281.866.9426

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