Developing a PTO Policy for Your Company

Consider What Works for Your Company When Developing a PTO Policy


More than 75 percent of employees in the United States of America say that paid vacation time, or paid time off (PTO), is an important benefit that employers should provide. As a benefit to employees and a competitive edge for employers looking to hire, PTO has a place in every industry. In fact, although the United States is one of the only advanced nations that does not require employers to provide PTO, a majority of employers  (69 percent) still offer it for the benefits it provides.

When considering a PTO plan for your company and employees, be sure you are creating a plan that fits for your company. Follow the below tips and call Employer Support Services for additional compliance help.


A employee enjoying paid time off with luggageThe Importance of Implementing a PTO Plan

PTO is an invaluable benefit to your employees and your company. Harvard Business Review found that employees who took a quality vacation provided a higher return on investment with more energy and a better outlook of work. Employers can also show they care for their employees’ mental and physical health with PTO for vacation, mental health days, and paid sick leave.

A work-life balance with appropriate recovery periods ensures employees are happy, have lower stress, and that they continue to perform at high-levels when they are at work.


Developing a PTO Plan that Works for Your Company

While providing a PTO plan is important for your company and employees, you need to make sure it works logistically. Employers can categorize paid time off differently. On average, employees get the following paid time off  in each category:

  • Vacation Days – 10.7
  • Sick Day – 6.5
  • Personal Days – 4
  • Holidays – 6.5
  • Volunteering Days – 2

Every employer does not offer each type of PTO, but on average, after one year of employment, employees receive at least 10 days of vacation time according to the Bureau of Labor Statistics.

There are also many types of ways you can establish your PTO plan. Whether you choose an accruement method or lump sum method, you’ll want to make sure you consider each of the following points to keep your employees happy and the company operating smoothly.

  1. Should you implement a PTO cap?

A cap will ensure your employees don’t accrue too many vacation days or ask for them all at once, which could hinder your productivity levels.

  1. Will you allow accrued days to roll over?

Rolling over PTO days can be beneficial to an employee. However, make sure it isn’t to the detriment of the company’s workflow. Consider how many days they can roll over and for how long.

  1. When an employee is terminated, will you pay out their PTO?

Certain state laws mandate PTO payouts in case of termination. Call ESS for help with your PTO policies.

  1. Will you limit the amount of PTO that can be taken at a time? Will you require a minimum?

If you don’t want your employees taking a month off at once, then setting a limit is advised. If you want them to take a minimum of a half or full day at a time, then set a minimum as well.

  1. How do you want them to alert you before taking PTO?

Set a standard on how you want the request to be filed. Whether that is through a digital request, written request, or calendar approval will be up to you.

  1. Will your PTO take the place of all paid absences or will you have a separate policy in place for unanticipated leave?

If you will have a different policy for bereavement, injuries, jury duty, or other unexpected life events, be sure to address this with employees.


Don’t Over Complicate Your Paid Time Off PolicyAn Employee taking advantage of company paid time off policy

Setting standards and expectations in your paid time off policy is good and will help keep employee leave organized. However, you can make the policy too difficult to understand. Many employers think they are helping employees by setting an abundance of specifications, but it often leaves employees confused. Make sure you don’t over complicate your PTO policy to the point that employees don’t know how to use their time off.


Consult Employer Support Services

While there are no federal regulations regarding PTO, there are many state laws and regulations that employers must follow to stay in compliance. Consult the experienced professionals at Employer Support Services to ensure your plan fits specific wage and hour laws mandated in your state.


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