Remote Work and COVID-19: Making Sure Your Company’s PTO Policy Works

Posted by Employer Flexible on October 14, 2020
Employer Flexible

The COVID-19 pandemic has touched every phase of the way we do business in 2020 and that includes issues such as your company’s PTO policy.

PTO (“Paid Time Off” or “Planned Time Off” or “Personal Time Off”) is a key benefit companies offer to employees to help with recruitment and retention.

The reality is that many Americans continue to work remotely during the pandemic affecting the administration of PTO policy. Employees have postponed or cancelled vacations in 2020 because of COVID-19 travel issues, and this may lead to an unexpected PTO surprise for businesses in the final months of the year.

PTO policies have been shifting in recent years as more American companies embrace the idea of PTO banks and unlimited PTO plans.

Remote Work and PTO

While some workers have returned to their offices, almost one-third are still working remotely, according to a Gallup survey. Companies not used to a remote workforce have had to adjust PTO, especially when it comes to tracking, as software is needed to administer PTO for those off-site.

The usual building blocks of any good PTO policy still apply to remote workers:

  • Create a PTO policy that works for your employees: The basic questions of how much PTO employees get, how the PTO is accrued, and how the PTO increases with tenure need to be answered. Does PTO rollover each year or is it use-it-or-lose-it needs to be addressed.
  • Communicate Your PTO Policy: Not only should your PTO policy be clearly detailed in your employee handbook but easy-to-understand materials explaining your PTO can be an effective hiring tool.
  • Apply Your PTO Evenly: This the right thing to do, and if you do not apply your PTO policy consistently, it could land your company in legal trouble.

Remote work may require companies to be more flexible in how they apply PTO as some employees may want to flex their hours to help with students learning from home or handle other life issues.

PTO: Fourth Quarter COVID-19 Surprise?

HRMorning reported in July that businesses could be in for a fourth quarter surprise, especially with use-it-or-lose PTO plans, as employees rush to use unspent days off in the final months of the calendar year.

Many Americans stopped travelling during the COVID-19 pandemic and that has resulted in a stockpile of PTO days that will likely be used by the end of the year. How much PTO could be built up? According to BLS data, the average American employee with one year of service has 10 PTO days. That number rises to 15 days by five years on the job and 17 days after 10 years.

To avoid understaffing at crucial times, companies should consider changing their rollover rules for PTO, either temporarily or permanently. Companies could also rethink the entire way they handle PTO.

Shifting Landscape of PTO Policies

PTO policies have been shifting the last decade with employers and employees seeing a win-win shift to PTO banks, which pools employee paid time off into one bundle instead of specific vacation, holiday, or sick day designations.

On the employer side, PTO banks make administration of PTO easier, and on the employee side, workers enjoy the freedom the plans offer. The Society for Human Resource Management reported in 2017 that, “a poll of over 450 U.S. employers, found strong growth in PTO banks—from 38 percent of employers in 2010 to 63 percent in 2015.”

Companies such as Netflix have also embraced an unlimited PTO policy as an enticement for younger workers looking for work-life balance. Unlimited PTO can cut administrative costs for companies, prevent the expense of paying out accrued unused PTO and stop end of the year rush to use days.

While old-school managers might worry unlimited PTO could be ripe for abuse, some studies have shown that employees with unlimited PTO plans take less days off than those under standard plans. If you need help with PTO policies or any other HR needs reach out to Employer Flexible today for solutions that can benefit your business.


Topics: HR, Employee Benefits, COVID-19