Sick leave? Vacation? Paid time off? It's all a bit overwhelming. Find out how to bundle employee benefits to best fit your drain cleaning business.
Many small businesses are changing how they bundle employee benefits. Sick leave? Vacation? Personal time? It’s all a bit overwhelming. Many companies are now adopting paid time off (PTO) plans, a bank of hours from which employees can draw. While PTO can be great for recruiting and retention, it does have problems — employees don’t want to waste vacation when they’re sick.
According to paycor.com, a human resources, payroll and timekeeping software solutions company, there are plenty of advantages to PTO plans:
- Better relationships: There is no incentive to lie about being sick or having a doctor’s appointment to use all annual sick days, resulting in more transparency in the employee/employer relationship.
- Better employees: Research indicates that incorporating a PTO policy results in employees taking more vacation time and fewer sick days. Most mental health professionals agree that employees return to work more refreshed and productive following vacation leave. The same results are not true for employees using sick days.
- Better organization: Employers only have to track PTO hours, as opposed to separately tracking hours for vacation, sick and personal days.
A drawback of a PTO policy, however, is that employees save up PTO time for vacation and come to work when they are sick, increasing the chance of other employees getting ill.
This is where proper management must step up: Hold employees accountable, and if they come into work sick, send them home. You need to protect the rest of your employees from a contagious employee. If the entire office is sick, then no one is productive, resulting in more downtime and profit loss.
An integrated PTO solution rolls it all into one — sick leave, vacation and personal time off. A company essentially doesn’t know, or care, why an employee takes time off: Regardless of the reason, an employee is charged against his or her accrued PTO. Perhaps that seems unappealing, however, the flexibility might be attractive to employers who don’t feel the need to know why employees are absent as long as they perform adequately while at work and time off doesn’t affect the quality of work.
If you’re considering making the switch, take a look at the company culture and determine what works best for everyone. And keep in mind, not everyone is going to be satisfied. It’s just how things work. A single 25-year-old individual who never gets sick would appreciate combined PTO because he or she could ultimately use it all for a three-week vacation. A married person who has three kids might not appreciate using vacation for a runny-nosed child, and he or she would prefer separate vacation and sick leave.
Another consideration is rollover. A use-it-or-lose-it policy means PTO cannot carry over to the next year. However, letting employees roll over unused paid time off serves as an additional incentive for conscientious employees, and discourages abuse from those who habitually use all accrued sick time.
Another problem you might run into: If you lay workers off during slow season or have to fire someone, you might have to pay that time out, depending on your company policy, employee agreement or contract, and state regulations. So, you could potentially be sitting on a lump sum of unpaid wages.
In some states, when an employee is terminated, all earned, accrued and unused vacation must be paid to the employee at his or her final rate of pay. However, vacation pay is usually only required upon termination if a company policy specifies employees will be paid for unused vacation time.
You can minimize the hassle of a legal mess or being hit with a huge payout if your company policy specifies that part-time or seasonal employees are not eligible for vacation or PTO. You can work out vacation or time off on an as-needed basis for intermittent employees who have doctors’ appointment or come down with a head cold. Part-time and seasonal employees do not have the responsibilities of full-time employees who work year-round, so it’s acceptable to minimize employee benefits, just like you probably don’t provide health insurance to summer help.
Unlimited sick leave is another option. According to an article on BussinessNewsDaily.com, when combined with PTO, unlimited sick leave minimizes issues with employees coming into work sick, decreases absenteeism and increases productivity. Sick employees are not going to be at peak performance, so let them stay home and rest. They’ll be much more productive when they come back rested and rejuvenated.
This also eliminates the use-it-or-lose-it mentality. “When there is no established number of paid days off, employees must rely on their own judgment and time management, which in turn, means they will most likely take less time off and only use what is needed,” says the article.
Unlimited sick days can also increase company morale. Employees feel empowered when you trust them to use time off for its intended purpose, and a generous sick-leave policy shows you care about their health and well-being.
If you’ve done your research and determined a PTO policy is right for your company, an take these tips from About.com to effectively manage the plan:
- Establish clear guidelines in advance. Include specific PTO rules in an employee handbook.
- A PTO plan works best in a company with a higher degree of flexibility.
- Manage the people, not just the PTO.
- If employees must request PTO in advance except for emergencies, how will you define “emergency”? Is waking up Monday morning with a bad hangover an emergency? What about a sick child, an attitude-adjustment day, or car trouble?
A small business lends itself to a PTO policy because fewer employees are more manageable, and a close-knit company made up of friends and family decreases the chance of someone abusing the system, or coming into work sick.