We are trying to determine our PTO policy for rehires. What are our options? Also, employers can choose how to treat PTO accrual in rehire situations, so long as we are consistent, correct?
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Options for rehired employees in terms of PTO accrual include the following:
Allowing a rehired employee to accrue PTO based on prior service combined with current service. The employer may condition this on the length of the break in service. For example, the employer may deny credit for prior service if the employee’s break in service exceeds the years of prior service. An employer may also designate a maximum time period. For example, if an employee terminated employment more than 5 years before rehire, there is no credit; or the credit is reduced by the amount of time that’s greater than 5 years.
Options for rehired employees in terms of PTO accrual include the following:
- Allowing a rehired employee to accrue PTO based on prior service combined with current service. The employer may condition this on the length of the break in service. For example, the employer may deny credit for prior service if the employee’s break in service exceeds the years of prior service. An employer may also designate a maximum time period. For example, if an employee terminated employment more than 5 years before rehire, there is no credit; or the credit is reduced by the amount of time that’s greater than 5 years.
- Crediting prior service only after a rehired employee has worked for a specified period of time (e.g., rehired employee must work for 12 months before receiving credit toward a higher accrual rate; credited time applies to PTO accrual going forward)
- Treating rehired employees like newly hired employees – no credit for past service
- Allowing a rehired employee who reached the highest rate of accrual (or other designated level) during prior service to accrue at that level when rehired. Again, this may be conditioned on the length of break in service.
As you noted in your inquiry, an employer must apply its rehire policy consistently to all applicants for rehire. This will help the employer avoid the claims that the policy is unfair, or that the employer is using the policy to unlawfully discriminate against applicants.