PTO policy

Did PTO Policies Inspire Paid Sick Leave Laws?

Another update from the Jungle…..

Last week’s story was about a sick employee who would not take time off from work because she didn’t want to burn through all her PTO days. As a result, she infected many of her co-workers spreading misery to everyone. If her company had offered paid sick leave separately from her PTO, would she have taken time off to get well rather than coming to work sick?

Years ago, employers began combining vacation and sick leave into a single category of leave called personal time off (PTO). PTO was administratively easier for employers to track in their HR and payroll systems. As an added bonus employers didn’t have to worry about violating HIPAA privacy because there was no need to verify that an employee was sick. It was easier for employees, too, since they didn’t have to fake symptoms or explain the gruesome details of their illness to justify their sick leave requests.

But PTO policies can be unnecessarily restrictive. A former employer of mine allowed only ten days of PTO a year. The practical effect was that everyone showed up sick in order to save a few days for a paid vacation. PTO restrictions didn’t apply to the owners or senior managers. Not surprisingly, morale was tanked, and turnover was astronomical.

Poorly designed PTO policies raise employer costs through poor morale and permanent recruiting efforts. Not only that, the policies seem unfair to workers. So it’s not surprising that many states are considering paid sick leave laws. Arizona, California, Connecticut, Maryland, Massachusetts, Oregon, Rhode Island, Vermont, and Washington now require paid sick leave. Washington, D.C. and a growing number of cities also require paid sick leave.

Tennessee is unlikely to enact a paid sick leave law any time soon. However, Tennessee employers with multi-state operations need to plan how they will address these laws.

  1. They should compare the cities and states where they have operations with those that require paid sick leave and verify they are in compliance with applicable laws.
  2. They should revise their employee handbooks to address paid sick leave laws, either by creating a separate handbook for affected locations or adding jurisdiction-specific addendums.
  3. They could design a company-wide paid sick leave policy to comply with all the jurisdictions where they have operations.

Deciding whether to change a PTO policy to add more days or creating a separate paid sick leave policy depends on a number of factors, notably the company’s corporate culture and the cost of offering the revised benefits.  The worst decision would be to ignore this issue.

If your company is struggling with HR issues, Corporate Compliance Risk Advisor can help you create HR policies that are appropriate for your company’s size and then serve as a resource to your staff as the policies are implemented.

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