When it’s time to create your paid time off (PTO) policy, it’s important to answer the five Ws and the H: who, what, when, where, why and how. Focusing first on the “why,” note that, in the actual policies, you don’t typically share why policies are created in the ways they are, but you should definitely consider why you are creating each policy as they are formulated. Annually, when you review the policies, consider why updates should (or should not) be made.
Who will each policy apply to? How will they differ for different people? Some practices, for example, might offer 80 hours of paid vacation hours per year to full-time employees, while part-time employees working 20 hours per week would receive 40 hours, and so forth
What types of PTO will you offer? Vacation time? Sick time? Personal time? Some practices lump all the hours together as PTO because it’s easier, administratively speaking, to track the total number of days (or hours) someone has available rather than breaking it up into multiple categories. The advantage of breaking it up: you can limit vacation time, for example, or the number of days someone can call off for personal time.
What can employees do with unused days at the end of the year? Carry them over to the next year? If not, will that PTO simply expire or can employees ask to be paid for those unused days?
When can employees use the PTO? Making it all available at the beginning of the year is easier but some employees might use all the time in Q1 and quit, so perhaps half can be available in Q1/2; the other half in Q3/4. When can employees start to use PTO? Is there a waiting period? If so, the waiting period for practices is typically 30 to 180 days. When will the amount of available PTO increase for employees? After they’ve worked at the practice for three years? Five? By how much will it increase?
Where should employees submit their requests for PTO? In a designated place on the company’s internal website? In the mailbox of the human resource director?
How much notice will you require when someone requests time off? This ranges from one to six weeks in most practices, depending upon the types of PTO offered. Do you allow any last-minute requests (outside of sick days which naturally are last minute)? If so, what?