Comments on: Paid time off: Watch out for these traps

By: Wanda

Wanda — Thu, 28 May 2009 13:23:20 +0000

What happens when someone goes on a business trip for a week or for training in another state? How does that count for hours?

By: Brenda

Brenda — Mon, 29 Dec 2008 23:51:24 +0000

The PTO and overtime comes into play only for calculation of total pay for overtime. This is true of some bonuses as well. If you pay out a lump sum of PTO or bonus, you are required to use this compensation in re-calculating overtime (you spread the amount of the payout across the period as part of regular pay and then re-calculate the overtime rate).

As for PTO vs. vacation, my rule of thumb has always been: If it is available for an employee to use, then it is accrued and therefore, should be payable as an unused benefit at termination. This is why some companies prefer not to “front” vacation or PTO to employees upfront at the beginning of the year, but rather make employees earn the time before it is available for taking. Just make sure your handbook is very clear about what is paid out and how.

The issue with some of the Use or Lose It policies listed here is that you are basically saying that if an employee quits before the end of the year (or whatever your vacation year is) then they will get all their unused time paid out, but if an employee stays with the company and does not use it, the lose it. Sounds rather backward.

By: BEVERLY NAPIERSKI

BEVERLY NAPIERSKI — Fri, 05 Dec 2008 18:21:08 +0000

We have a “use it or lose it” policy and upon termination we do not pay for any unused time. All time must be used prior to giving notice. In addition, we do not use PTO when calculating overtime. My understanding is overtime comes into play after an employee actually “works” over 40 hours in a week. Is my interruption of Pennsylvania’s law in error? Are we in violation? It seems the employer is always on the short end of the stick.

By: Melissa

Melissa — Fri, 05 Dec 2008 18:19:21 +0000

Also, Judy,very true! How did we get to this feeling of entitlement being so widespread?

By: Melissa

Melissa — Fri, 05 Dec 2008 18:18:09 +0000

We used to have combined PTO for all vacation and sick time. I found that combining them made it okay to take all days off. Once they were separated and the employees have vacation time accured and sick time alongside that for only sick time, I often have employees who do not use all of their sick time. As a small business, we need our people here as often as possible. Even a few extra days a year goes a long way in the customer service industry.
If you are thinking about changing from combined PTO to separatly allocated PTO you may want to think about increasing the vacation portion slighlty as to not create an uproar in your offices by making it possible for the employees to feel you are taking time away from them.

By: Judy Taylor

Judy Taylor — Fri, 05 Dec 2008 00:06:05 +0000

What have we done? Everybody has their hand out & the courts make us fill them. What ever happened to earning your pay?

By: Mary McIntyre

Mary McIntyre — Thu, 04 Dec 2008 22:49:54 +0000

This was very interesting and informative. Does the overtime pay also apply to a pay period where there is Holiday? That is, does a worker receive overtime pay when a paid holiday throws him/her over 40 hours? Where does Missouri laws fit in to this?

By: Maria Decker

Maria Decker — Thu, 04 Dec 2008 22:43:14 +0000

Our business is in NM.

1. Our vacation policy states that you use your vacation days in the current year or lose it. Upon termination, however, we pay for unused days and accrued vacation. Is the first statement legal?

2. We do not use vacation time in the calculation of overtime. Is this legal?