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Paid Time Off Strategies for 2021

Flexible, supportive, compliant.

When it comes to defining the paid time off policies for employees, they should be flexible, supportive, and compliant. Particularly after the experiences and lessons learned from 2020. Let’s take a look at what this means for your small business.

Flexible – Whether the paid time off (PTO) policy is a bucket of time or is broken out between separate allotments of time for vacation, sick, etc., the policy should be flexible to meet the varied needs of individual employees. In our recommendations of constructing a PTO policy, we lean more towards the bucket of time approach just because it really does give employees the flexibility to use the time how they see fit and not feel like they have to explain details as to why they are taking time off. It is up to each individual company to decide which approach works best for them, while also considering flexibility.

Supportive - PTO policies should be designed to support and encourage employees to use the time and have a separation from work. Although people aren’t traveling and taking the vacations during the pandemic that they have before, it is important to continue to encourage employees to use their PTO and take extended time off of work, not just one day here and there. One way to think about the benefit of a full week off versus a long week is that a drink of water is refreshing, but a glass of water is nourishing. Employees need the longer time away to full disconnect, refresh and recharge.

Another strategy for a supportive paid time off policy is to ensure that employees are set up for successful time away and they don’t feel like they need to be connected. See our previous blog here that outlines supportive PTO techniques.

Compliant – Outside of the Families First Coronavirus Response Act (FFCRA), there are no Federal regulations related to paid time off such as vacation, sick or holiday pay. It is based on company policy set by the employer. However, once that policy or practice is in place, it needs to be clear, comprehensive and should be followed consistently to avoid potential violation of other application employment regulations. Even though there aren’t federal requirements related to paid time off, the following states have laws either in whole or in part related to the requirement of paid sick time: Arizona, California, Connecticut, Washington DC, Chicago, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, Oregon, Pennsylvania, Rhode Island, Texas, Vermont, Washington. This list of states will continue to grow, and we may even see a federal regulation in the coming years.

Paid time off is an important benefit that can be a differentiator in a competitive labor market. Take a look at what your small businesses PTO policy and if it isn’t flexible, supportive or compliant, let’s talk about it and we can help.

- Deanna

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