Too good to be true? The Pros and Cons of Unlimited PTO
Yes, you read that headline right. If you haven’t heard of this new benefit strategy, let it be known that unlimited paid time-off (PTO) policies are becoming a common culture tactic used by technology start-ups and millennial-heavy professional services organizations. Although an attractive perk, the enticing benefits have many asking, “So, how does that work?”
Traditionally, time off is separated into paid vacation, sick and personal days. Some companies, including Assurance, have transitioned into simply offering PTO, which essentially serves as a single “bucket” of time off, which can be used at the employee’s discretion. A less-common option is the unlimited PTO policy.
A basic unlimited PTO policy is similar to a normal PTO policy except employees aren’t given an allotted number of days off. Employees can take as many vacation, sick and mental-health days as they need, as long as they’re meeting their performance goals.
This type of policy doesn’t, mean an employee can take unplanned time off, except for sick days or similar emergencies. PTO requests must still be approved by a manager as with a traditional PTO or vacation time policy, and your company’s established work schedule or flex-time benefits can remain the same as with traditional PTO. Obviously, there are various benefits and drawbacks to consider before implementing an unlimited PTO policy.
Advantages of Unlimited PTO:
- Fosters a sense of trust in employees and encourages a culture of responsibility
- Serves as an attractive benefit when recruiting top job candidates
- Reduces the likelihood that employees will come to work while sick. Days off are not accrued, meaning that, depending on applicable state laws, you might not have to pay out for vacation time when an employee leaves the company
Disadvantages of Unlimited PTO:
- Makes terminating employees who abuses the policy difficult
- Requires tracking of time off to monitor abuse and prove compliance with various regulations (FMLA, ADA, etc.)
Unlimited PTO can provide advantages to both the employer and employees if carefully considered and implemented. Our Employee Benefits ‘A’ Team can help you weigh your options. Contact us today!
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