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Policies for Personal Time Off

Posted by Barry Rubin on 3/28/2016 to Tips and Resources
Policies for Personal Time Off
As WEO Certified Professionals we are often asked by clients about a paid time off or PTO policy for employees, and more often specifically part time employees.  The answers can vary depending on where our clients are based with regard to governmental mandates and what if any labor unions or European equivalent, trade union agreements are in place.  In Canada, for example, there is an employment standard and PTO is calculated at 4% of annual earnings, except in Saskatchewan where it jumps to 6%.  So as you see it can be confusing.

The U.S. Fair Labor Standards Act (FLSA) does not define full-time employment or part-time employment. This is a matter generally determined by the employer. Under the Employee Retirement Income Security Act (ERISA), an employee who works 1,000 hours or more for a company during a calendar year is treated exactly in the same way as a full-time employee for purposes of qualifying for retirement coverage. The U.S. Department of Labor uses a definition of 34 or fewer hours a week as part-time work, but this definition is only used to gather statistical data, and has no relevance in day to day operations of American based business.

Since there is no legal requirement in the United States that an employer provide any employees with PTO, companies do not typically offer PTO to employees working less than a 40 hour work week, however some do, and provided a policy is set, and timekeeping record keeping is up to date, there should be very little issue in instituting a PTO policy for hourly employees.

The most important questions will also be the most obvious.  Such as, will there be a waiting period before the PTO accrual can begin? Referencing Canada there is not, and accruals start on the first day of employment, while in the U.S. there is a usual waiting time for even full time and/or salaried employees. Will you implement a "use it or lose it" policy?  If so do you currently use a workforce scheduling program or time clock software that includes scheduling that will provide enough flexibility that everyone is able to access their PTO within the allowable timeframe.  How will employees manage their PTO, and how will the request it?  Again, there are workforce systems that can do all of the above.

 Whatever policy and PTO tracking method you choose, it needs to apply to every part-time employee otherwise, you may be setting your company up for a discrimination claim which even if completely unfounded can be a waste of time and company resources. Consult with a WEO certified professional, state you policy clearly in a employee handbook which every employee receives a copy of, and maintain a labor asset management program or time clock software that allows tracking of PTO, and you will be worry free.