This article addresses the reasons why employees should be given paid time off for personal purposes. It also shows how tracking time-off with OfficeClip time-off software application will simplify your work process. In many countries (like the United States), the government has no mandate to give Paid Time Off (PTO) to the employees. Yet, most companies have created plans to provide these benefits to their employees.
What is Paid Time Off?
PTO(Paid Time Off) is an organizational policy that provides the employees with bankable hours, where employees get paid while taking leave from work.
These leaves consist of sick leaves, vacation days, leaves for medical emergencies, or for personal reasons. All these leaves are a PTO package and the employee can use these at their discretion.
Every company has different policies for Paid Time Off. Some companies provide an increased number of Time offs with increasing years of service, while some provide long term leaves as a sabbatical.
Many organization even allows the flexibility of sharing Paid Time Offs between departmental employees.
Why is Paid Time Off important?
- Paid time off gives employees required rest from the monotony of work.
- A majority of managers agree that encouraging time off makes their employees more willing to put in the long hours when needed. This, in turn, will help increase productivity.
- It helps balance work and personal life, which will help them take care of other projects and pursue other activities
- According to Harvard Business Review, 1 in 5 highly engaged employees experience high levels of burnout and stress leading to fatigue, disengagement, and low performance. This is a direct result of not taking appropriate time off from work.
Advantages of Paid Time Off (PTO):
- A good PTO policy can serve as an incentive to attract prospective employees while retaining current employees.
- The Paid Time Off policy provides more benefits to senior employees. Companies want to retain them and can offer more benefits in increasing their Paid Time Offs.
- It becomes easy for the HR department to track the kinds of leaves employees take and make payroll calculations easier.
- In the absence of a senior employee, a junior employee gets a chance to handle new responsibilities and gain experience. This will help to transfer knowledge and vital information between the team members.
- With flexible time offs available, employees can use these time offs whenever they like, and for whatever reason they want.
- It will help create a work-life balance for employees and focus more on their family, personal growth, and other individual activities. This, in turn, will help to reduce stress and allows them to concentrate on required tasks at home, and improve productivity at work.
- With different PTO categories available, the employee no longer has to make excuses if they want to use a sick day. It will help to create transparency between the employee and employer.
- Employees who have a bank of Paid Time Off hours feel more empowered because they do not have to justify their day-offs and can take time offs as and when they need.
Disadvantages of PTO:
- When an employee takes a time off, some other person may need to cover her responsibilities; for a smaller organization with fewer employees, it may be a difficult task.
- PTOs are expensive, employees are getting paid for not doing any work. If someone is taking time off for a week, he gets paid for the full week. Not every employer, especially small businesses, cannot afford this kind of cost.
- It is very important to plan the PTOs during popular times. Many employees may consider taking an extended vacation during the Christmas season or the new year. So, managers need to discuss these issues among the staff members and plan time offs accordingly.
- Depending on the company’s PTO policy, if some employees may leave or quit with a large bank of PTO day leaves, this may add some additional financial burden on the company.
- Sometimes employees may report to work sick to save their time offs for an extended vacation.
- Few less cautious employees may see that they have 20 days PTO and may plan a vacation of 20 days, leaving no room for medical emergencies or sick leaves.
Implementation of Paid Time Off in OfficeClip
People previously used Excel sheets or would track time offs for their employees manually. This kind of system makes it difficult to maintain the data if you have a large number of employees. It also makes the calculation of payroll a tedious process.
Along with tracking time in OfficeClip, your team can also track their Time Offs. Tracking time off and tracking time for your employees within one application will help to maintain all the data in one place.
Step 1: Creating categories for Time Off:
Administrators need to create categories of Time Offs in the System.
These leave categories consist of name, code, and description. Enabling accruals will help to create different policies for each leave categories. These leave categories will help determine who is taking leave and for what purpose, through the history in each category. The employees can also view the availability of their time offs in each category and plan leaves accordingly.
Step 2: Create Accrual Policies for various Time Off categories:
Accruals are the amount of Time off’s employees earn as per the company’s policy, which has not been used or paid. The fixed number of hours accrued every month in the employee’s leave account are calculated and are redeemed based on the company policy. Many companies limit how much accrued Time offs to roll over or how many Time offs can be compensated.
For example, John has Paid Time Off 1.5 days every month of the year starting January. So, in February end, John would have accrued 3 days of paid Time offs. Some companies allow cash out of the balance of paid leaves at the end of the year, while others allow it to carry over to the next year (up to a maximum).
The administrators create these policies. Accrual policy in each leave category varies from person to person in an organization. It usually depends on the rank of the employee or years of service.
Once these accrual policies are created, the Administrators set up the users for these accruals and the effective date. When the employee puts the time off request, the system automatically calculates the time off hours. If the time off is all used up for a particular category, the user will receive a warning. The employees can also check their time off balances from the History or from My Time offs.
Step 3: Creating a Time Off request
Time Off requests are created by the employees and approved by the supervisor. Employees are presented with a screen (like shown below) to request their time off. They can either request a full time off or a partial day time off.
Step 4: Approving the Time Off request:
Every time off request submitted needs to be approved. The Administrator sets an approver for each user. The approver can approve or reject the time offs and add a comment for the rejected time-offs.
Step 5: Checking PTO balance:
The employees, their supervisor, and administrators can easily view the PTO balance. It shows a balance sheet of all the Time Offs requested and approved for the entire year.
Step 6: Making Adjustments:
OfficeClip Time off application can make adjustments for time worked. Many times the employees work during weekends or work extra time after the usual office hours. These working hours during the weekends or overtime are compensated as Adjustments.
Configure the Adjustments with the adjustment date, amount of hours worked, and description. The work adjustment will be adjusted in that particular leave category.
Step 7: Monitoring employee availability with Time Off Calendar & Reports:
OfficeClip offers a calendar for the entire team to view the time off statuses. It gives a better idea of employee availability and helps in better planning and allocation of work.
Similarly, Time off reports also give an idea of the Time off requested, Time off history, and Time off by Approver. Administrators can also create custom reports for Time off based on their requirements.
Using OfficeClip Free Time off tracker will:
- Make it easy to track leaves taken by employees in different categories.
- Streamline the time off request process and approvals.
- It will give a clear idea of employees’ time off, available balance, used balance, and availability.
- With various time off categories and different accrual policies in each category, the payroll calculations become much easier.
- Paid time off gives some control over the unscheduled absence.
Deepa Kapoor is an online writer for small businesses. She loves to write on the advancements of new technologies and how it affects our lives. She always explores ways to make small businesses more profitable. When not writing, she enjoys reading books and cooking exotic traditional food.