Paid Time Off: Is It an Employee Benefit or an Old-fashioned Con? - TheStreet

NEW YORK (MainStreet) - PTO - aka Paid Time Off - has become the fastest train steaming down the Human Resources track. In a wink, it does away with traditional sick and vacation and personal leave days and, shazam, replaces them with a single bucket of days to be used by the employee at his discretion.

So what's not to like?

Actually, plenty.

But let's start with this reality: PTO is gaining fast on traditional ways of allocating days off to employees. Minnesota HR consultant Arlene Vernon said that in a recent count, 40% of businesses had PTO in place, compared to 54% with traditional plans and 6% with "other." But that 40% is up from essentially nothing. In 2001, in a survey, just 28% of businesses were using PTO.

Go back a generation earlier, and PTO was non-existent in the workplace. Most HR experts now believe PTO will be the dominant way of awarding days off within a few years and, said Vernon, although she has consulted on many company conversions from traditional to PTO, she had never worked on one in the other direction. That is, once on PTO, companies don't go back to traditional.


Why do companies like PTO? "It's time saving and it's flexible," said Lori Kleiman, who blogs at HRTopics.com.

For its part, HR loves PTO, elaborated Vernon, because it makes the jobs of those in the HR department easier. In traditional plans, when an employee takes off a day, it has to be allocated into sick days, personal days off (usually including religious holidays) or vacation days. With PTO, instead of getting, say, 17 days - ten vacation, five sick, and two personal - an employee gets a fixed number of days and any day taken off is counted against that total. No need to classify the reason.

Another reason why PTO is popular with HR: it minimizes employee lying. In the old system, employees often took "mental health days," as they called the days they took off to recharge, but usually that employee claimed a fever or a sore throat or another temporary ailment when he called in with an excuse. HR in many cases knew these were lies but, what was HR to do?

But PTO is not a cure-all, and one common complaint under PTO is that "employees report to work sick all the time," said business consultant David Lee. In traditional plans, sick days were for illness and, honestly, few employees used them all. So if they had a hacking cough or a high fever that might be associated with a communicable disease, most usually stayed home. Now, however, that PTO day is potentially a vacation day. Do you want to stay home today in bed? Or save that day to use at the ski slopes in two months? You have that right. Many employees are dragging themselves into work when they are sick, because they will be damned if they will burn a PTO day on a sore throat - even if by showing up at work they may be giving half the workforce the flu. That's the single most common gripe about PTO.

But there is another, more sinister complaint about PTO: that many employers claw back days off from employees in converting to PTO. Take the traditional 17 days - ten vacation, five sick, two personal - convert it into PTO and, typically, said several PTO experts, those 17 days become 15 or 14. In some companies, the grab is more muscular, with the employer clawing back five or more days.

Won't anyone notice? The employer spin is that employees aren't 100% entitled to sick days, and, in fact, most employees only take one or three a year, so erasing a couple is no big deal. True?

When PTO is put into place, said Vernon, healthy employees usually think they are getting a bonus and the unhealthy feel they are getting screwed. They may just both be right. "


PTO gives healthy employees a lot more control over their days off," said Vernon, and it may also give those healthy employees additional days off, because they can enjoy what had been sick days on the beach or skiing. But come down with pneumonia - or just a really bad flu - and the shortcomings of PTO will quickly be highlighted because that employee is going to be using vacation days to handle a sickness.

And if your employer is among those who claw back five or more days, well, that's a week's pay and, guess what, you just played three card monte with a hustler and the predictable happened. You lost.

Written by Robert McGarvey for MainStreet