2. The traditional paid time off policy
This is the third post in a series about 10 things to know when creating a PTO policy.
As mentioned in a previous post, PTO policies generally fall into 3 broad categories:
- Unlimited PTO Policies
- Traditional PTO Policies
- PTO Bank Policies
This post focuses on the second option, which is still the most popular (especially with large organizations), but is gradually falling from favor; The Traditional Paid Time Off Policy.
A Traditional PTO Policy is normally defined as having a separate allocation of paid time off per year for vacation leave, sick leave, bereavement leave, and jury duty, in addition to paying the 10 mandated federal holidays.
Most traditional time off policies award paid time off for vacation and sick leave on an accrual basis (where paid time off is earned gradually throughout the calendar year).
However, it is also quite common for sick leave for the whole year to instead be allocated in a lump sum at the start of each calendar year. The method you decide to use for awarding sick leave normally comes down to whatever is easier to administer based on the leave management system you choose to implement.
The Traditional PTO Policy is generally considered to carry the greatest administrative burden of the 3 types of PTO policies, but is still used by up to half of all US companies.
It has the advantage of clearly separating out the reasons staff require time off, and does not rely on staff being able to budget enough time for unforseen time off due to illness as is the case with “PTO Bank” type policies.