Marking up that 2017 calendar to note important dates and deadlines? Here’s one to note in red—January 31 is National Plan for Vacation Day, a day the people behind an initiative called “Project: Time Off” have set as a day to encourage hardworking and devoted employees to plan some rest and relaxation. 
The travel-related industries supporting Project: Time Off say employers that encourage employees to take a break from work see benefits such as better morale, higher performing workers, and lower stress levels. Certainly encouraging employees to stay home when they’re sick also benefits employers by preventing illness from spreading throughout the workplace.
An employer may have good intentions, but devising a policy to enable employees to take the time off they need can get complicated. Issues policymakers must consider include:
- Should workers be given a certain number of days to be used in case of sickness and other days designated for vacation?
- What about allowing a few personal days or floating holidays that can be taken one at a time instead of in blocks?
- Or maybe it’s simpler to just allow a certain amount of time off—call it paid time off (PTO)—and don’t worry if employees use the time because of illness or for rest and relaxation.
PTO popular, usually simpler
The PTO concept has gained popularity in recent years since it generally makes the process of granting time off simpler. Employers don’t have to concern themselves with determining whether an employee taking a day off for a routine doctor’s appointment qualifies for a sick day or whether the day should be subtracted from vacation time. Also, the employer doesn’t have to figure out if an employee who calls in sick is really ill or just wanting a day off.
PTO usually is the simpler option, but it’s not without its own difficulties, according to Kara E. Shea, an attorney with Butler Snow LLP in Nashville, Tennessee. Now that more and more jurisdictions are requiring employers to provide a certain amount of paid sick leave, “employers need to think about how to coordinate their PTO policies with mandatory paid sick leave laws, and that can get complicated,” she says.
“For instance, if you are in a mandatory sick leave jurisdiction but you already have a general PTO policy, you have to decide whether your PTO policy meets all the requirements of the applicable sick leave law,” Shea says. “If you allow employees to use PTO for sick days, and you offer at least as much PTO as the amount of time required by the sick leave law, you probably have met the most important requirements of the law, but there may be more to it than that.”
PTO compliance concerns
Shea says compliance issues can arise even when a PTO policy is more generous in some respects than the law requires, since many employers place conditions on their leave benefits.
For example, some employers require workers to be employed for a certain length of time before qualifying for leave, and some employers don’t offer leave to part-time employees. Some employers don’t extend leave benefits to employees under disciplinary action, and others require employees to take leave time in blocks, such as five days in a row.
Those restrictions are fine for a voluntary benefit program, Shea says, “but if you are trying to use your paid leave program to comply with a paid sick leave law, you have to make sure the conditions you have placed on employees taking leave don’t run afoul of the law.”
Shea says she’s run into problems when reviewing PTO policies of some employers that are federal contractors. President Barack Obama issued Executive Order 13706 in September 2015 requiring federal contractors and subcontractors to provide employees with up to seven days (56 hours) of paid sick time per year, accrued at the rate of one hour for every 30 hours worked.
The order affects contracts taking effect after January 1, 2017, and it requires that employees be allowed to use the leave for their own illness, to care for a family member, or in the event of domestic violence, sexual assault, or stalking.
Shea says she’s seen a rise in popularity of PTO versus separate sick day and vacation time policies. “PTO is simpler in a lot of respects and requires less work by the employer to administer,” she says. “One reason it’s simpler is that it’s sort of a ‘no fault’ system. If the employee wants a day off, he just takes it and doesn’t have to explain why, whereas if an employee takes a ‘sick day’ under a sick leave policy but takes it for a reason other than being sick, the employee has technically violated the policy. Under a looser PTO system, the employer doesn’t have to be the ‘leave police’ or deal with that kind of disciplinary issue.”