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Paid Time Off (Pto) Policies

In: Business and Management

Submitted By PGSwin
Words 1738
Pages 7
Traditional leave systems separate time off into vacation, sick leave, personal leave, and other types of leave. In contrast, paid time off (PTO) banks typically combine all time off benefits into one cumulative bank of days which an employee can draw upon for any need. The delineations of such plans vary by employer (Lindemann & Miller, 2012). In an organization, employees may receive time off for as compensation benefits. This may include sick leave, personal leave, vacations, holidays, etc. Different organizations have different PTO policies. Paid time off can be defined as any time that is not worked, but is paid. Although these plans are costly to companies, they view these plans as employee friendly. Companies try to offer the best plans, which are very competitive in attracting and retaining a talented workforce (Smith, 2012). Most employers prefer to come up with paid time off plans. This creates a flexible arrangement that allows the employee to use his/her off days at his/her discretion. The amount of days off accumulates through the years of service, and his/her position in the organization. Some companies allow their employees to carry their unused leave days for the next period. Some companies pay cash for their employees leave days while others insist those days to be taken as specified in the employment policy. Sick-leave programs provide short-term insurance to workers against loss of wages due to short-term illness. In 2011, 37 percent of U.S. firms offered paid sick-leave benefits. However, in many firms such well-intentioned programs have often added to labor costs because of abuse by employees and because of the widespread perception that sick leave is a right and that if it is not used; it will be lost (“use it or lose it”). From the employer's perspective, such unscheduled absences cost between 8 and 20 percent of payroll annually. To...

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