Although there are no federal or state laws that require an employer to pay for vacation or sick time, many employers offer these benefits as an additional enticement for employees. Employers need to consider whether they should maintain a traditional paid vacation/sick program or a paid time-off (PTO) program.
The traditional program maintains separate “banks” for vacation and sick time and generally has different policies for vacation time and for sick time regarding usage, carryover, vesting, etc.
The PTO plan lumps all time together and doesn’t differentiate as to why the employee is taking the time.
There are benefits and drawbacks to both and state laws can impact programs in areas such as vesting. Employers should carefully consider the pros and cons of each and then establish clearly defined policies in their Employer Handbooks.
To learn more be sure to read this month’s featured article by the HR pros at MyHRSupportCenter, Traditional or PTO. If you’re not yet signed up or would like a free trial of MyHRSupportCenter, contact Vision Payroll today.