Paid Time Off (Combined Leave)

[Guest Lynn Grabany]

I am interested in knowing what kind of special considerations a company

might take when making the conversion from traditional accruals of separate

vacation and sick leave to a combined paid time off arrangement. If anyone

has made such a leap, I would appreciate any advice or tips you could

provide.

Thanks in advance for whatever anyone can provide.

[Sheila K]

Lynn:

When we made our transition, we actually moved to a dual system, PTO and Reserve Sick Bank (RSB). We moved traditional vacation time to PTO and traditional sick time to RSB on a 1:1 ratio. The RSB account is used only for extended illnesses. All employees are required to use three days of PTO before they can begin using the RSB time. PTO time is paid out at 75% upon separation, RSB is not paid out. We continue to accrue RSB time for all employees, but at a much lower rate than before.

If you would like more specific details, please e-mail me privately.

[Guest Broot]

Lynn,

Our transition was similar to Sheila's - we did this almost 10 years ago. Any vacation time that was accrued when the policy took place became PTO (hour for hour). Sick time, up to 12 weeks worth, went into a grandfathered sick bank. Any sick time above 12 weeks worth vanished, never to be seen again. In order to use sick bank hours, an employee must have a situation that falls under FMLA.

Employees accrue PTO throughout the year, with a cap of 1.5 times the annual accrual. PTO hours are paid out when an employee leaves employment, but sick bank hours just go away. If an employee who forfeited sick bank hours at termination is rehired, they don't get the hours back.

One mistake that we made at transition time was not clearly documenting for employees the rules around the sick bank and forfeiture of hours. (We've since done that, but should have from the start). Other than that, PTO has been a very successful program for us over the years.

Beth

[oriecat]

We moved to a PTO system back in 97 I believe. I am very happy with it. It just seems to be more fair to me, because before you would have employees who take their 3 weeks of vacation and then call in sick all the time using up weeks of sick leave too, so they end up getting paid not to work for 5 weeks, while a good employee who is always at work only gets paid not to work for their 3 weeks of vacation.

We also instituted what we call Long Term Leave, which accrues up to a max of 480 hours (12 weeks). It can only be used once you have zero PTO, and can only be used in FMLA situations.

At the transfer, we moved up to 48 hours of old sick time to the vacation time to make the new PTO time. Any sick hours after the 48 were then made into the LTL Bank.

One thing to consider could be the difference in your workers comp premium, because generally to my knowledge (at least under our policy!) vacation pay is excludable from taxable wages, but PTO, since it is not differentiated between sick and vacation, is not excludable.