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The FAQ’s of PTO

Frequently Asked Questions (FAQs) About Paid Time Off Policies and Procedures

Having paid time off (PTO) is one of the most valued benefits employers can offer. So valued, that 63% of employees wouldn’t consider a job opportunity that offered fewer than 15 paid vacation days. Despite this, the U.S. is still one of the only developed countries that does not guarantee paid time off. What does this mean for employers? Offering an exceptional PTO package is a must-have when it comes to attracting and retaining top talent.

We’ve compliled a list of frequently asked questions to help you navigate common issues and put together an effective strategy:

Q.  Do you need to pay out unused vacation to employees who leave your company?
A.  In most states, it is the decision of the company; but you must make this clear in a company policy or handbook.

Q.  Can you require an employee to use PTO if they haven’t requested it?
A.  In most states, employers can require employees to exhaust paid time off before taking time off without pay.

Q.  What is the average number of paid holidays provided by employers?
A.  On average, employers in the U.S. offer 7.6 days of paid holidays annually.

Q.  Are employers required to provide paid federal holidays or PTO?
A.  In most states, employers are not required to offer any paid holidays or paid time off.

Q.  Is it a best practice to grant a credit for paid holidays that occur during an employee’s vacation?
A.  It is generally the practice to grant credit for paid holidays that occur during an employee’s vacation.

Q.  What are some of the difference between a traditional leave program and a PTO system?
A.  PTO leave plans generally encompass both sick and vacation leave (and sometimes other leave categories as well) offering more flexibility in how employees use leave. While PTO has become quite popular in the last couple of decades, not all employees or employers are in favor of it.  Detractors have said PTO programs, typically, offer less time off overall than a traditional vacation/sick leave program and can result in employees coming to work when they are sick to avoid using a PTO day that could later be used as vacation.

Q.  How much time-off should be awarded to new hires?
A.  This varies greatly from one industry to another; but very generally, a minimum of 2 weeks or 10 days.

Q.  What are PTO donation programs?
A.  These programs allow employees to donate leave to other employees facing a serious illness or other tragedy in their lives who otherwise would not have the leave to cover their absences.

Q.  Should employees be able to cash out their unused time?
A.  While some employers offer this, it is not a popular option. Most employers feel it is important for employees to take time away from work to reenergize and clear their minds with family and friends.

Q.  Is it common to pay out vacation time upon termination of an employee?
A.  In most states, this is up to the employer’s discretion as long as it is stated in a policy or employee handbook. Generally, it is about 50/50 with some doing so and some not.

Q.  Where is paid sick leave required?
A.  There are a few states that require paid sick leave and the specific requirements vary.

Q.  What is the difference between a paid sick leave policy and a PTO policy?
A.  PTO programs encompass both vacation and sick leave. There are typically a set number of paid days that can be used as sick leave or vacation leave.

Having the right program in place is an essential part of a successful PTO policy and can prevent any issues from arising during busy periods. For more on this topic, check out the OneDigital blog post: Managing Paid Time Off During the Busy Season.

To learn more about PTO policies or how to implement an attractive package for your company, contact your OneDigital Consultant.