Time off management gets harder as your workforce grows.

But it doesn’t have to.

A Human Resources Management System (HRMS) handles the moving parts:

  1. FMLA
  2. Timekeeping for salaried, hourly, remote, mobile, and contract workers
  3. Employee vacation requests
  4. Manager approvals
  5. Time off policy documentation and training
  6. Employee scheduling

Summary of 7 Key Findings About Employee Leave

1. Employees rank paid vacation as their second most-valued benefit after health insurance. (Project Time Off)

2. According to the Bureau of Labor Statistics (BLS), in 2018 the average PTO for all U.S. employers was 9.7 days annually plus 3-4 days for every 5 years of employment.

3. More than half of U.S. employees forfeit vacation days every year. (U.S. Travel.org)

4. In 2018, American workers failed to use 768 million vacation days. (U.S. Travel.org)

5. Employees who believe their organization encourages vacation report higher job satisfaction. (Project Time Off)

6. Many U.S. employers expect vacationing employees to work remotely for part of the day while they are away. When this is the case, employees are less likely to benefit physically and emotionally from the time off. (Mark Gorkin, MSW, LICSW, “The Stress Doc”)

7. 54% of organizations that switched to a combined PTO policy had a 10% decrease in unscheduled absences. 4% experienced a decrease of 20%. (The Alexander Hamilton Institute)

What are the risks of poor time off management?

Mismanaged leave has far-reaching effects;

  • Lower workforce morale
  • Employee burnout
  • Higher turnover
  • Negative employer reputation
  • Reduced productivity
  • FMLA violations

7 Ways to Streamline Leave Management

You need a legal, workable policy combined with good HR software.

  1. Use HRMS time off tools
  2. Understand federal FMLA laws
  3. Understand state/local employee leave laws for every state in which you have employees and check frequently for changes
  4. Create and document a PTO policy
  5. Train HR, managers, and employees on company policies and laws
  6. Track time for both hourly, salaried, mobile, and remote employees
  7. Optimize employee scheduling

What Is PTO?

Employers with PTO (Paid Time Off) allow employees to take time off while still being paid their salary or wage.

Types of Leave

  • Sick Time/FMLA
  • Vacation
  • Holidays
  • Bereavement Leave
  • Floating Holidays
  • Jury Duty

Do you have to provide paid leave?

Not at the federal level. FMLA requires you to provide unpaid leave. You can’t terminate a worker if the time off qualifies under FMLA.

Some states/cities require employers to provide a minimum amount of paid time off. Some laws regulate whether you have to compensate workers for unused paid leave upon termination. This type of law is called ‘PTO pay-out.’ Consult legal counsel when creating your policy.

Types of Time Off Policies

Traditional Leave

Traditional leave categorizes the type of leave. These include sick days, personal days, holidays, and vacation. PTO usually refers to paid leave that isn’t categorized.

PTO (Paid Time Off) Banks

PTO is uncategorized leave. Staff can use them however they want.

Unlimited PTO

With unlimited PTO, employees can take as many days as they want.

PTO Purchase Plan

A PTO buy-sell or purchase plan allows workers to buy and sell vacation days. The ‘currency’ is their regular salary.

This type of policy is often included in a cafeteria (or flex) program. Employees can use pre-tax earnings to purchase benefits of their choice. These may include health insurance, life insurance, supplemental insurance, and flex spending accounts.

Consider these factors for time off management:

Are you a new employer? Here are some leave management factors to consider:

Rollover laws

Your state/city might obligate you to allow earned PTO to rollover into the next year.

What do other employers in my industry and market provide?

You can find information at the Bureau of Labor Statistics. Glassdoor may also have data about competitors’ policies.

Do you have a lot of unscheduled absences?

If productivity wanes because of a high rate of unscheduled absences, a PTO bank may help. But it’s tricky to switch policies. Make sure employees don’t lose accruals they have earned.

HRMS Time Off Management

An HRMS automates time off management. It ensures precise tracking and transparency. It makes it easy for your workforce to request leave.

WorkforceHUB is SwipeClock’s HRMS. WorkforceHUB streamlines time off management:

  • Onsite, mobile, and remote time tracking
  • Employee scheduling
  • Time-off accruals
  • Time card approvals
  • Payroll export
  • Employee and manager notifications
  • Overtime management
  • Meals/breaks tracking
  • Time theft prevention

To learn more about how an HRMS works, see HRMS Success, How to Manage Human Resources in 2020.

By Liz Strikwerda

Liz Strikwerda