Paid Time Off Benefits

Editor's Note: Paid Time Off Benefits are an important part of an employer's benefit offerings.

Jessica Webb-Ayer

Overview: Employers often voluntarily offer different forms of paid time off (PTO) as an employee benefit. PTO benefits are meant to improve recruiting, retention and employee loyalty. Employers offer many different types of PTO, including vacation days, personal days, sick days and holidays. Instead of providing separate vacation, personal and sick days, some employers use a PTO bank, which does not differentiate between types of time off.

Employers should clearly define the way that PTO is earned and when it can be used. A written and published policy will help manage employee expectations and allow the business to properly staff all areas of the organization. It is also advisable for an employer to have a written and published policy for defending against potential lawsuits or for evidence in disciplinary proceedings. PTO policies should take into consideration state laws on "use it or lose it" policies and termination pay.

Trends: Unlimited vacation is a benefits trends that has become increasingly popular. Vacation is considered "unlimited" when an employer eliminates caps on vacation time, and presumably, employees can take as much time off as they want as long as they are getting their work done.

Author: Jessica Webb-Ayer, JD, Legal Editor

New and Updated