HR Management & Compliance

Taking a New Look at Sick Time/PTO Policies

Work/life balance is increasingly important to American employees. A survey using data from 2018 found that work/life balance was considered “very important” by two-thirds of male respondents and over three-quarters of female respondents.

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Companies recognize that work/life balance is a useful recruitment and retention tool, and it’s a benefit that is often less costly than boosting salaries. Because of this and the value employees place on work/life balance, companies are expanding the availability of remote work opportunities, particularly in response to the COVID-19 pandemic.

Paid time off (PTO) has also long been an indicator of employees’ potential for work/life balance. Many companies have embraced “unlimited PTO” policies, under which staff can take as much time off as they like as long as they fulfill their job requirements.

Other companies offer a set amount of both vacation and sick time, which brings us to the focus of this feature. Here, with input from industry experts and HR practitioners, we look at the current and likely future use of sick days in the workplace: Why have a separate bucket for “sick days” at all? What is an appropriate use of sick days? To what extent should companies enforce that appropriate use? And, considering this new environment, how does the COVID-19 pandemic impact this?

Why Is It Beneficial for Companies to Provide Sick Days That Are Separate from PTO?

Many companies that provide both sick days and vacation days see the sick days as just-in-case time staff aren’t expected to use. These companies expect employees to plan ahead and use their vacation time for things they enjoy without having to bank time for when they get sick.

“Sick days should definitely be separate from paid time off because you want to incentivize your employees to take days off when they’re not feeling well,” says Tatyana Tyagun, the HR Generalist at Chanty. “Otherwise, they’ll end up working sick because they don’t want to waste their paid days off. You should be reasonably flexible because, ultimately, you want to give your employees the freedom to take sick leave and paid days off when they need it.”

What Constitutes an Appropriate Use of Sick Days?

When companies do decide to create separate vacation and sick time, they have to manage the line they’ve created between these two forms of PTO. The perfectly healthy employee “calling in sick” to get a day off work is a well-worn cliché.

In truth, consider that many of your employees did essentially the same thing as schoolchildren. The difference with work, of course, is that employees are typically getting paid not to come into work when they are sick.

So, what is an appropriate use of a sick day, and how strictly should companies enforce those rules? What if a staff member is simply feeling a bit down emotionally? What if the worker’s personal activities bled into his or her professional life, and he or she is under the weather from a late night out?

Experts recommend applying policies flexibly, particularly when it comes to mental health. “Last year we repositioned our sick leave as ‘wellbeing leave’ to encourage our staff to feel comfortable to not only take leave for physical illness, but also to take time off for their own mental and emotional wellbeing,” says Jana Galbraith, Director of People Experience—Americas at Xero. In the United States this year, the company has doubled the number of well-being days for employees, she adds.

Building on that, and to mark World Mental Health Day on October 10, 2020, Xero gifted all staff globally 1 extra well-being day. “Taking care of your mental health looks different for everyone, and we were pleased to be able to offer our Xeros the flexibility to choose when and how they want to use their days,” Galbraith says.

As for employees calling in sick the day after a long night, trust is key in avoiding inappropriate abuse of policies. There is always the potential for abuse with any policy, but those cases should be treated as exceptions, and the policy shouldn’t be changed in a way that impacts everyone. This means having trust in employees to do the right thing and having trust in managers to appropriately balance flexibility, accountability, and productivity with their staff members.

“Don’t fight flexibility, embrace it,” advises Nathan Peirson, Vice President of Human Resources at human capital management company Paycor. “We’re trusting our employees to work remotely, represent our brand, service our customers, and drive our success without needing to monitor every action. I think policies make sense to provide the guardrails but it’s best to lean toward building trust and enabling our associates. Managing their time off should be no different.”

What Does the Future Hold?

The COVID-19 pandemic has changed and will continue to change how companies look at sick days. The severity and contagiousness of the virus have highlighted the need to prevent staff from “fighting through” sickness at the office and infecting coworkers.

At the same time, companies across the country have become more comfortable with employees working remotely, meaning sick employees who could risk transmitting a disease to others could now work in isolation.

While some companies make sick time separate from vacation time to ensure employees use their sick days instead of coming to work sick, sick days have gone out of fashion in many organizations and have been replaced by liberal PTO policies that combine vacation and sick days or even allow for unlimited PTO.

The COVID-19 pandemic has created a fundamental shift in how employers and employees treat the importance of in-office work, as well as the significance of staying out of the office when sick, and these changes are likely to last well beyond the pandemic and complement an existing move toward greater flexibility in employee time off.

There is, of course, no one-size-fits-all approach. The practices that work best for a particular organization will depend on its culture and the habits and abilities of staff and managers.

What approach do you take with designing your time-off policies and why?