Offering paid time off and vacation time

Part 1 of a 3-part series,
“Creating an employee benefits package”

It is a common misconception that all employee benefits packages are expensive and generally not an option for the smallest Arizona business owners. Although options like health coverage and employer-matching 401(k) accounts are indeed expensive components to a benefits package, there are more reasonable options that also work toward making a workforce feel happier and more appreciated.

Offering workers paid time off (PTO) and vacation days is a low-cost step in creating a more successful work environment. The amount of time off may vary by seniority, but it gives workers one more reason to stay loyal to a company in hopes of increasing their PTO bank or getting more vacation time.

Paid time off
Perhaps the most attractive quality of PTO is that workers can essentially use the time to do whatever they please. Gone are the days of calling in and faking sick or having to use valuable vacation time to make an afternoon doctor appointment; instead, workers can be given the chance to use time from PTO banks as they see fit. Some employers allow PTO rollovers that carry into the following year if unused.

PTO may be assigned and accrued in several ways, but it’s important to create a company standard and carefully outline the company policy in an employee handbook. It’s also important for business owners to include PTO usage policies, including advance notice, expiration times, rollover policies and even unexcused absences. Employees who choose to simply not show up for work, compromising a company’s productivity, should not be permitted to use PTO and may be penalized accordingly.

Vacation time
Companies have no legal obligation to offer employees vacation time, but it shouldn’t stop Arizona business owners from considering the benefits of giving employees some time away from work. Vacation time does more than benefit workers, though. When businesses offer workers paid time off, it also goes a long way in improving worker productivity and can benefit employers who instill a “use it or lose it” vacation day policy without rollover options.

Vacation days may also be used as employee rewards, which allows employers to remain a competitive business. Days may be distributed equally or based on an employee’s years of service. Regardless, it is important to outline the policy and terms in an employee handbook.

Other types of time off
Although PTO and vacation policies are not mandatory for employers, there are some types of time off that are. The Family Medical Leave Act (FMLA) requires employers with a staff of 50 or more and all public agencies and education agencies (regardless of how many employees) to allow workers to take up to 12 weeks of unpaid leave when they are affected with debilitating medical issues, must care for a sick family member, or leave to care for a new child by birth, adoption or foster care. A major component of the FMLA is that an employee’s job is protected during his or her leave and is not filled while he or she is gone.

Other forms of “extra” time off may include flextime schedules, which allows workers the options of telecommuting and shorter work weeks as long as the work is completed; and unpaid sabbaticals, which may be offered for qualified workers who choose to take a longer period of time off to travel, continue their education or work on a personal project.

No matter the type or amount of low-cost vacation time offered to workers, Arizona employers may update company policies and handbooks to reflect the changes. Consult legal advisers and resources from the U.S. Department of Labor to ensure policies are compliant with the law, and the workplace can become a happier, more productive environment in no time.

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