Paid Time Off: All You Need to Know About PTO

6 of September, 2022

Sooner or later, every employer would have to deal with employee paid time off. There is simply no escaping it; your employees are humans, and humans always need to rest. When talking about PTO, it is impossible not to touch the very controversial subject of time off management. In this article, we would be addressing this topic, providing you with all you need to know about the matter.

What is PTO (Paid Time Off?

The term paid time off (PTO) is rather straightforward; it is time an employee spends away from work, for which the he still gets paid.

PTO offers employees to take a number of days off work while still receiving pay. Unlike unpaid leaves, in which a percentage of the employee’s income is deducted for the time spent off the job, paid time offs incur no such reduction in income.

How Does PTO Work?

There is no rigid rule governing how paid time off can be allocated to employees. There are no federal laws mandating that employees be provided with PTO in the first place. That being said, the effects on employee performance and productivity has proven to be too beneficial to be overlooked, so most companies offer them regardless. 

With there being no laws regulating PTOs, however, different companies provide these PTOs to their employees in different ways. 

Some companies provide a set amount of PTO to their employees each year and allow the employees to choose how and when to use their allocated time off. Others let employees build paid time off based on the number of hours worked throughout the year and then cash in the PTO later. 

When an employee feels the need to use their accrued PTO, they request the paid time off from their manager or supervisor who then forwards the request to human resources. HR then looks into the employee’s PTO bank and deducts the requested days from the employee’s banked time. Should the employee not have any PTO left to spend, then they receive an unpaid leave instead.

Common PTO Types

Since there are very few regulations in the work environment, there is a lot of flexibility in this department. Some companies include vacations and sick days as part of their PTOs. Other companies have separate programs for vacations and sick days, and these programs are separate from their PTO programs.

Do I Have to Offer Paid Time Off (PTO)?

As stated earlier, there is no avoiding it, sooner or later, you’d get requests from your employees for leave. And more often than not, this would be a request for paid time off. The first thing you want to do is ensure that the employee’s job would be taken care of while they are on leave. Failure to do this would lead to the deduction of your business productivity. 

After ensuring the employee’s work is covered, the next thing to do is to track the employee’s time off with a time off management solution. This helps you keep track of how much time each employee has left in their PTO bank.

Conclusion

Paid time off is always a welcome inclusion in any business. It is not mandated by law, but it does you more good to offer it. Whatever PTO strategy you choose, make sure to remember to track your employee’s time off with Sesame HR. This would help you to track the amount of time left in each employee’s paid time off bank.