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Converting Sick/Vacation to PTO
Benefits & Compensation
Converting Sick/Vacation to PTO
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
Our small, private non-profit organization is planning to make the switch from separate Vacation and Sick time accruals to Paid Time Off.
Currently, employees accrue sick time at the rate of 5 hou
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Forums » Topic Forums » Benefits & Compensation » Converting Sick/Vacation to PTO
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Converting Sick/Vacation to PTO
posted at 12/2/2008 7:09 AM EST
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Posts: 80
First: 4/18/2006 Last: 12/2/2008 |
Our small, private non-profit organization is planning to make the switch from separate Vacation and Sick time accruals to Paid Time Off.
Currently, employees accrue sick time at the rate of 5 hours per month with a cap of 480 hours. Vacation is accrued based on time in service; employees accrue anywhere from 10 days per year to a max of 20 days per year. The vacation time cap also varies from 120-240 hours. My questions are as follows: 1: How do we convert sick time in a way that's fair to the employer and the employees? I'm in California so sick time is not a liability in the same way vacation is, however we are hesitant to wipe the slate entirely clean for some of our long term employees who have a high vacation time balance. 2. How do we arrive at a PTO accrual rate? Is there some type of formula we could use, i.e. current vacation accrual plus a percentage of current sick time accrual? Any help will be GREATLY appreciated! |
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Converting Sick/Vacation to PTO
posted at 12/2/2008 8:29 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
It's hard to answer your questions without knowing the end goal. I would ask what exactly are your goals of switching? To lower accrued amounts? To let the employees use sick time for vacation? To stop employees from "calling in sick" when they just want a day off?
I see the bind you are in...that is accruals possibly being very high for long term employees both with vacation and sick. But unless you go hour for hour with prior accruals, it is going to look like a cutback because it will be in total paid time accrued. Would your budget allow for the employees to sell back some of their accrued sick time to lower the overall accrual? Even if it is not at 100%? As for the accrual formula, are you wanting to have the same overall # of days accrued each year? Are you looking to decrease it? Just my thoughts! |
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Converting Sick/Vacation to PTO
posted at 12/2/2008 10:54 AM EST
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Posts: 80
First: 4/18/2006 Last: 12/2/2008 |
Good questions. I'd say our primary goals are to lower accrual amounts as well as increase attendance - our president is under the impression that people abuse sick time (although I can't say that I agree in any substantive way). Plus, it seems that separate accruals are a bit old school so we're trying to keep pace with current employment practices.
We've talking about offering a buy out for a portion of sick time, such as we'll buy 1 hour for every 5 hours of accrual. We've also discussed using the same formula to convert sick time to PTO hours. As far as accrual, I think we're looking to decrease the amount of overall accrual. Since we're not mandated to cash out sick time it doesn't seem like a wise business decision to simply turn that accrual into cash/PTO. However, we don't want employees to be totally shorted on time off. Does that make sense? |
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Converting Sick/Vacation to PTO
posted at 2/13/2009 3:57 AM EST
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Posts: 21
First: 5/3/2005 Last: 4/15/2011 |
I am in the same boat. We have vacation and sick time and we want to move to PTO however I am having a hard time with Finance because it changes the liability we have to show on the books.
Anyway, what we are doing is running reports of vacation and sick time utilized. When we did this in the past, we found that employees used their vacation and about 30% of the sick time on average. So for instance, if we have 10 sick and 5 vacation days, we may do now 13 PTO days. This will be a win for those who don't use sick (they get 3 extra vac days) and a loss for those who use all of their sick because now they will be using PTO. But that's the flexibility of PTO. We want to increase the accrual based on years of service. I purchased book that was good but I don't have it in front of me. It was a PTO book and is really good. I'll find it. |
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Converting Sick/Vacation to PTO
posted at 2/13/2009 4:12 AM EST
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
One other thing to consider. That is the psychology of an employee expecting to use all their vacation time, but trying to save their sick time for a needed time. You lose that with PTO.
I am willing to bet that you will find all your employees will use all 13 PTO days. I'd be interested to see how many used 13 total between vacation and sick last year. Because it does look like the formula you used does come out more in the favor of the employees....which may be your purpose, but if it is a cost saving measure, you may not realize what you expect to. |
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