Let’s talk about time-off. I’m often asked are there any regulations requiring our company to pay employees for time off? In the old days, the answer was NO. Today, the answer is MAYBE.
In states, like New York, there are laws that require some employers to pay for sick time. Other business, just choose to provide paid time off as another employee benefit. You may be wondering how many different time-of categories should our company have? Many companies have moved away from having separate time-off buckets for vacation, sick, and personal days.
It’s easier for companies to combine all these buckets into one called Paid Time Off or PTO. You may be thinking isn’t if best for our company just to give employees 2 weeks paid time off, all UPFRONT, every year?
Not necessarily. That’s old fashioned and was popular when businesses kept tracking of time off with a spreadsheet. Businesses would lose money if an employee took two weeks PTO in January and then suddenly quit in February?
There is a better way. Have your employees accrue a little bit of time and earn PTO every single pay period. Your payroll company should easily be able to do these two things for you: First, accrue PTO every pay period for all your employees, and two, accrue PTO based on each employee’s hire date.
This way the system will automatically increase PTO accruals based on length of service, so employees with more tenure will automatically earn more PTO time.