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Apr08

PTO for part-time employees with flexible work schedules?

My employees are all part-time and have the benefit of making their own schedules, provided they complete assigned work. All employees work in-home with clients and are paid only for their billable time with clients. I would like to offer PTO, but don’t know how to set it up, since they can essentially re-arrange their schedules to accommodate what they need. Would it make sense to allow them to use it only when they have to cancel a client (or a client cancels on them)? Any suggestions are welcome. Thank you!

Companies with true flexible work schedules generally don’t offer PTO. Reason being, the employees can re-arrange their schedules as needed to address personal matters. However, that’s not to say that such a company shouldn’t offer PTO. PTO is often considered a highly regarded benefit among all employees. Carefully crafting a policy that accomplishes your reason for offering the benefit and takes in to consideration employee needs is important.

If you haven’t already, considering surveying your employees to determine if there is even a need for PTO. Have employees mentioned that they want paid holidays or vacation time? Decide what you want to accomplish by adopting a PTO policy. Do you want to attract better talent or increase employee morale? Consider these questions prior to crafting the policy. You may decide another benefit addresses employee needs and your goals better.

Determine a PTO earning method. Employees can earn PTO based on the number of hours worked or you can award PTO in one lump sum for an established time period (pay period, year, etc…). If most of your employees work the same average number of hours, then either method can be considered. However, if some employees only work 5 hours a week while others work closer to 30, you may want to consider a method in which employees earn PTO based on the number of hours worked. This will ensure the benefit is applied in a fair manner.

Most accrual based methods set a maximum number of hours that can be accrued. While most lump sum methods limit or prohibit unused PTO from carrying over to the next benefit time period.

Since the employees make their own schedules it may be difficult to enforce guidelines regarding when PTO can be used. How would you know that a client canceled on an employee versus the employee canceling on the client? You may want to simply allow employees to use their PTO whenever a scheduled appointment must be canceled. (You may want to get feedback on this during your employee survey. When/Why would employees expect to need PTO?). Whatever guidelines you adopt, make sure they’re clearly stated in the policy.

Unfortunately, it’s difficult to provide specific guidance without knowing the company’s culture. Thus, be certain you understand what your employees need/want out of a PTO policy.

Keep in mind some states have adopted legislation regarding PTO or vacation policies. Of the states that have such laws, some require employers to adhere to their established practices or policies, some restrict use-it-or-lose-it policies, and some require accrued time to be paid to the employee at separation. Thus, it’s important to be aware of any related legislation in your state. Feel free to post another question with the state listed and we can research applicable laws for you.

This entry was posted on Wednesday, April 8th, 2015 at 1:30 pm and is filed under
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2 Responses to “PTO for part-time employees with flexible work schedules?”

  1. Jill Says:

    Thank you so much for your detailed response. It is very helpful. I do know that the employees would like to have PTO. I would expect them to use it when they have multiple cancellations during a week (such as snow/ice days) or illness that prevents them from seeing kids. One employee just had a baby and would have liked to have had some PTO to use while she was off, I’m sure.

    We are in NC, if you are able to provide any state specific guidelines, it would be much appreciated, as well. As a small business owner, it is very difficult to research everything that needs to be done while keeping up with the day to day.

    Again, thank you.

  2. hrlady Says:

    Hi Jill,
    You’re very welcome. We’re here to help! A PTO accrual method based on hours worked sounds like it would be your best bet. Be sure you’re clear in the policy that PTO can only be used when an appointment is cancelled. You want to make sure that employees don’t expect to be able to use 30 hours of banked PTO all in one week, when they normally only work 10 hours.
    In NC, there is no requirement for employers to provide employees with any PTO. However, if an employer chooses to provide such a benefit, it must comply with the terms of its policy.
    Also, if PTO is offered the employer must have a written policy that addresses the following:
    1. How and when vacation is earned so that the employees know the amount of vacation to which they are entitled;
    2. Whether or not vacation time may be carried forward from one year to another, and if so, in what amount;
    3. When vacation time must be taken;
    4. When and if vacation pay may be paid in lieu of time off; and
    5. Under what conditions vacation pay will be forfeited upon discontinuation of employment for any reason.
    So, you can adopt a use-it-or-lose-it policy which requires employees to use their accrued time by a certain date or it’s forfeited, and you can implement a maximum number of PTO hours that an employee can accrue. Additionally, you can require employees to meet certain guidelines at the time of employment separation in order for their remaining PTO time to be paid out (most commonly, employees must give two weeks resignation notice). Just remember that any and all stipulations must be in writing.
    HTH!

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