Let’s start by understanding: What is PTO? Paid time off (PTO) is a popular benefit among employees, and if used properly, it can benefit both the employer and the employee. While large companies seem to have an advantage in terms of flexibility and resources when it comes to offering this benefit, small and mid-size companies also have an opportunity to create a PTO policy that helps them stand out as the employer-of-choice.
A wise business owner creates a policy that will help to grow and sustain the company. Here are three considerations for choosing the right PTO policy for your business:
Do you want to offer unlimited PTO? A 2015 blog on The Huffington Post referred to unlimited PTO as a publicity stunt. The blog noted that employees at large companies with a highly competitive environment are unlikely to take weeks and weeks off from work. Consider whether that would be true for your company.
While some companies prefer a “use it or lose” philosophy when it comes to PTO, exchanging PTO for cash is another concept that has gained popularity. Employees who tend to accrue a lot of time may appreciate the opportunity to cash out rather than lose time or stop accruing PTO when hitting deadlines.
Since PTO can be considered a liability on an accounting sheet, allowing payout for PTO can be advantageous to employers as well. However, employers must be cognizant of governing laws and regulations that may restrict their ability to allow employees to cash out PTO.
Options for PTO can be benchmarked based on industry, but at the end of the day, a PTO policy should add to the value of your company as an employer people want to work for. Also, it should conform to the needs of your business. Your TriNet representative can help to create a PTO policy that will fit your needs for today and your plans for tomorrow.
This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.