Finding the Best Paid Leave Policy for Your Business

Thinking of offering your employees paid time off (PTO)? Maybe you already provide sick time, but you are concerned it doesn’t meet newly enacted mandates in your location. Perhaps, you want to expand paid leave benefits in this tight job market as hiring and retention incentive.

By Kim Freeman – Director of HR Services, JD

Finding the Best Paid Leave Policy for Your Business

Whatever your motivation, by partnering with a Professional Employer Organization (PEO) such as Resourcing Edge, you can provide your employees with a policy that fits your business needs, reflects best practices, and is legally compliant. The HR experts at Resourcing Edge will work with owners and managers to customize a perfect policy for your company and its employees.

Why Companies Should Offer PTO

1.  Employee Productivity and Morale

Studies indicate paid time off increases productivity and morale. Paid time off in conjunction with programs and resources on the worksite to reduce stress can have a positive effect on job satisfaction (American Psychological Association). Not only are workers better rested and maintain greater work/life balance, but by having a formalized time off program, management and co-workers can plan better for absences.

2.  Tight Job Market

Unemployment continues to hover at historic lows. In September 2018, less than 4 percent of the job-seeking population was unemployed (Bureau of Labor Statistics). To entice the best employees and keep the rockstars you have, greater perks must be considered.  

3.  More Governmental Mandates

More than two dozen local and state governments have passed legislation mandating paid time off for employees (National Partnership). Companies that already have established policies are ahead of this growing trend. Often the existing policy will meet legal requirements of a new mandate. But if it doesn’t, by working with your PEO partner, the changes can be made quickly to ensure compliance.

What Types of Policies are Available

The variety of paid leave policies available for consideration can be overwhelming, especially for a business owner who has lots of other matters to address. That is the beauty of being a PEO client, you can work with a dedicated staff of HR professionals that can advise on the options best for your business.

The most common policies break out in two broad categories: 1. PTO and 2. Sick and Vacation Leave. 

1.  PTO

PTO is an award of paid time that an employee is granted to cover most absences, such as for vacation, illness, emergency, or to attend to other personal matters. By not pigeonholing the reason for the absence, the time is more flexible than traditional leave policies.

2.  Sick Time/Vacation Time

Some companies provide a bank of time designated solely for the employee’s absences related to illness and have a separate bucket for “vacation.” For example, an employee may be given 3 days (or 24 hours) of sick leave, plus 10 days (80 hours) of vacation time.

Issues to Consider

When deciding what type of policy best suits your business, your PEO partner will provide an HR professional at Resourcing Edge to assist in determining:

How a PEO Can Help

By partnering with a PEO, companies can depend on HR professionals to design paid time off programs that meet the business needs, represent best HR practices, and are compliant with existing law.

As a client of Resourcing Edge, these types of programs can be reported through the payroll system, so the time is properly paid and tracked. A PEO can also recommend the use of a time and attendance system. A time and attendance system can make it easier to track and automatically report leave into the payroll system.

If you find your policy needs changed or isn’t working to fit the business needs, PEO clients can contact HR staff for assistance. In addition, Resourcing Edge stays up-to-date with changes in laws and trends in paid leave and can proactively assist clients with any needed revisions to existing policies.

If you want to develop a paid leave policy, update an existing one, or check the compliance of your current policy, contact Resourcing Edge.

Kim Freeman is the Director of HR Services at Resourcing Edge, and a licensed attorney. The information presented in this article is for informational purposes only and does not constitute legal advice or create a lawyer-client relationship.