This post is part of the series of articles about 10 things to know when creating a PTO policy.
Ahhhh, T.G.I.F. Anyway, on to business…
Another thing to consider when drafting your PTO policy is when to start each PTO year.
The two main options are to start the PTO year at the start of the calendar year, or to start each year on the anniversary of each employee’s start date.
Each option has their own implications depending on the other policy clauses you have in place.
If you use the start of the calendar year as the start of the PTO year, it makes it easy to determine everyone’s schedule and might make calculating balances easier especially if you grant employees their PTO in a single lump sum each year.
It does make it more difficult to calculate the pro-rata balance for newer employees that start part way through the year, and if you have a policy of “use it or lose it” you’re potentially going to end up with people scrambling to use their PTO before year end all at once which is a busy time for some businesses.
If you use the anniversary date of the employee as the start of the PTO year, you might find it is more difficult to manage balances as everyone will be on a different schedule, but you don’t have to worry about pro-rata balances for new employees in their first year, plus if you have a tiered policy of allocating more time off for longer serving staff, the years of service tier they fall into correlates exactly to the accrual period, making it much easier to calculate their PTO allowance.
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