Paid Time Off: How to Create a Robust Policy in Your Business


Entrepreneurs who run small- to mid-size businesses often can’t do it alone. Hiring employees can help you keep your business running efficiently – that is, if you select talented staff members who are a good match for the skills you need.

When you have a substantial benefits package, it tells your staff they are valued, and you care about their well-being. Paid personal days and extra paid vacation time will probably be well-received, helping you hire and retain talented workers. It also benefits employees’ well-being. According to research, taking paid vacation days was associated with better health. Before selecting your first employee, take the time to design an appealing benefits package.

Paid Time Off, Explained

Paid time off is a benefit that companies offer in which the employee is given a designated amount of paid time to use for vacation, sick days or personal reasons. You can offer a set amount of hours initially or require employees to work to accrue PTO.


First Steps and Possible Drawbacks

To get started, develop a basic framework:

  • How much PTO do employees have?
  • Who qualifies – do contract and part-time workers get PTO?
  • When can they begin using PTO – can they “borrow” from their PTO bank?
  • How is time off earned?
  • The procedure for requesting PTO – how far in advance should employees schedule days off?
  • Whether PTO is accrued or paid at year’s end?
  • What happens to PTO when employees quit?

You also need to decide if all PTO comes from the same bank of hours or if you want to divide sick, personal and vacation time.

There are some possible adverse outcomes to consider:

  • An unfair policy that causes employee dissatisfaction
  • A policy that’s easy to violate
  • A lawsuit

You can avoid some conflicts by clearly stating your PTO policy to all employees. Be sure they can access the plan at any time. It can also help to set request deadlines and determine how to handle multiple requests for the same period. You may choose to grant requests based on seniority or a first-come, first-serve basis. You should also check your state and local laws to learn what is allowed.

Preparing a PTO Document

You can prepare a thorough PTO document for new hires to sign. This paperwork can serve as a record that staff members and management refer to. It should be a professional document that is formatted well and looks good when presented.

You may need to send large PDF copies of the PTO document to remote employees. In that case, it can be difficult to send through email or other online methods. Try compressing the PDF file to make it easier to send. The key to success here is to ensure the smaller file keeps its elements and structure. The right PDF compressor tool can reduce the file size while preserving the integrity of the fonts, images, and other content.

Building a robust PTO package takes some research and thoughtful design. However, it pays off when you attract talented staff members who can help your business achieve its goals.


Asking for Help

If you’d like to get some guidance from a business consultant, Arrowhead Consulting is always here to assist. Check out our website for a list of our services.

Next, check out our blog on 5 Principles of Project Management for Event Planners

Guest post by Amy Collett

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