We’ve got a situation around our PTO (Paid Time Off) program. When we first initiated it, people liked it, and we thought that the very clear policy—exceed your accrued PTO days and you won’t get paid for any additional time off—would work well. We figured employees would hoard their days, and that we’d only have a few who went over their allotment and took time off without pay. What’s happening is that many of our workers are taking all their accrued PTO time and then taking more time off without pay, so much so that the other employees are mad—the workers who do come to work spend their time picking up the slack for the workers who are taking so much extra time. And we’re not pleased that the program has led to this unintended consequence, either. What can we do? — Jeanne, HR Director in Santa Barbara
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
Most employers have good intentions when instituting paid time off policies to provide employees more freedom to use PTO in ways that can help them effectively balance their job responsibilities with illness and nonwork obligations. Unfortunately, as you are experiencing, some employees have difficulty budgeting their PTO time and don’t save a sufficient reserve for unexpected illnesses or emergencies. Others simply enjoy taking the additional time off and can handle not being paid—exacerbating the difficult situation you describe.
To control the sort of PTO abuse you are experiencing, I would suggest that you consider revising your PTO policy to address abuse issues. Although only a few of your employees are abusing the system, it sounds like you have reached the point where you need to start formally controlling when employees take time off without pay. Consider the following possibilities for your policy:
- All time off must be approved in advance by a manager. This gives management a degree of control over the situation, especially regarding workload and overloading other employees.
- Employees must schedule half of all accrued time off by a specific date. (The date will depend on whether you provide leave on a calendar year or individual accrual). This can help ensure that a number of lengthy absences aren’t taken at the same time.
- Prohibit time off without pay. Under limited circumstances, employees may take time off without pay per the Company’s Personal Leave of Absence Policy.
- Permit employees to take an advance of their unaccrued PTO. Consider placing a cap on the amount of unaccrued PTO an employee may take in any given time period. For example, if an employee has exhausted his or her accrued PTO, your policy might allow an advance of up to 24 hours of PTO once in any 12-month period. To take additional PTO, the employee would have to wait until he or she had paid back the advance (in time or money) and had accrued additional PTO hours. Note: If an employee resigns before “paying back” advanced, unearned PTO time, consult legal counsel, especially before deducting any amounts from an employee’s final pay.
Allison West is principal of Employment Practices Specialists, an employment law training and consulting firm in Pacifica.