Estimated reading time: 5 minutes
Summer is finally here and most people are thinking about vacation! Paid Time Off policies help churches provide that much-needed rest for their employees.
Church employees work hard and deserve the benefit of paid time away from the job.
The goal of a PTO policy is to reduce the number of unplanned absences.
A formal Paid Time Off (PTO) policy provides employees with the flexibility to use their paid time hours as they deem necessary.
Paid time off benefits provide employees with the opportunity to take sick days or vacation time by choosing how and when to use their bank of hours.
This bank of hours combines sick, personal, and vacation days and requires employees to use banked hours for any paid time away from work.
What Is the Advantage of a Paid Time Off Policy?
The advantage of a paid time off policy, (as compared to traditional sick time and vacation time accruals), is that it provides employees with the flexibility to make their own choices in how they use personal time away from the job.
For instance, a traditional policy may allow an employee two weeks of vacation, six paid holidays, and five days of sick time.
When an employee uses all of one or the other, they have to wait until they accrue additional hours in order to use that benefit.
This traditional policy limits how an employee can take time by forcing them to use vacation time for vacation and sick time for being sick.
A PTO policy eliminates those restrictions and allows employees to choose how and when they use their time.
What About Employees With An Extended Illness?
There are occasions when employees have to deal with an extended illness. In these situations, an employee may need specific hours designated for sick pay.
Serious health issues warrant a separate bank of sick hours that can accrue with years of service.
This is often referred to as an Extended Illness Bank (EIB) and the use of those hours is for more serious and long-term illnesses that require an employee to be away from work longer than three days.
For instance, a woman who goes on maternity leave for six weeks may use hours that she has accrued in her EIB account.
Example PTO/EIB Policy and Accrual
Purpose
To ensure full-time and regular part-time employees have adequate personal time and rest by providing paid time away from work for vacation, sick days, and personal time.
Definition of Terms
Paid Time Off (PTO) – Paid time employees can use for vacation, personal days, or sick (three or less) days.
Extended Illness Bank (EIB) – Sick hours employees can use for extended (more than 3 days) illness.
Full-time Staff (FT) – An employee who works 40 hours per week.
Regular Part-time Staff (RPT) – An employee who works a minimum of 24 hours per week.
Irregular Part-time Staff (IPT) – Employees who work less than 24 hours per week.
Paid Time Off (PTO) Accrual Full-time Employees
| Years of Service | Hours Accrued | # of Days | Hourly Accrual Rate | |
| 1-4 | 160 | 20 | 0.0769230 | |
| 5-14 | 200 | 25 | 0.0961538 | |
| 15+ | 240 | 30 | 0.1153846 |
How Hours are Accrued
Paid Time Off (PTO) accrues at a per hour rate for every hour worked for non-exempt regular part-time (RPT) and full-time (FT) employees.
For example, a part-time non-exempt employee will accrue 0.0769230 per hour worked. A part-time employee who works 24 hours a week will accrue hours based on hours worked. The PTO hours are calculated by taking 24(hours) x 0.0769230 (accrual rate) = 1.846 hours of PTO per week or 1.846 X 52 (weeks) = 96 hours of PTO per year or 12 days.
Exempt accrual is based on a 40-hour workweek.
For example, a full-time exempt employee (less than 5 years of service) will accrue 0.0769230769 per hour worked. A full-time employee works 2080 hours over the course of 12 months. The PTO hours are calculated by taking 2,080(hours) x 0.0769230 (accrual rate) = 160 hours or 20 days of PTO
There is no accrual on non-productive hours paid (PTO hours).
Accrual begins at employment but there is a 90-day waiting period before any PTO time can be used.
Holidays are not included in the PTO accrual and are paid immediately upon employment for full-time employees.
Paid Time Off is used for vacation days, sick days (three days or less), and other personal days.
PTO hours do not accrue beyond the allocated annual accrual rate and unused banked hours roll over to a maximum of 480 hours.
Upon termination of employment, an employee will be paid for all accrued and unused PTO at their regular rate of pay.
These example accrual graphs are based on a full-time employee accrual rate.
Part-time employees (if you choose to offer this benefit) accrue based on hours worked.
Extended Illness (EIB) Accrual Full-time Employees
| Years of Service | Hours Accrued | # of Days | Hourly Accrual Rate | |
| 1-4 | 40 | 5 | 0.0192307 | |
| 5-14 | 40 | 5 | 0.0192307 | |
| 15+ | 40 | 5 | 0.0192307 |
Extended Illness Bank is used after the third day of sick leave and accrues to a maximum of 520 hours (13 weeks). EIB hours are not paid at the time of an employee’s termination.
Other Considerations As You Create A PTO Policy
- Banked hours are dollar valued, so there needs to be a budget for this benefit.
- Employees should be required to request time off by using a PTO request form and approval by their immediate supervisor.
- When an employee is on an extended medical leave a doctor’s letter confirming illness and duration of leave should be required as in a FMLA policy.
- Most payroll software should be able to calculate accrual based on accrual rate.
This is an example of how your organization can begin to create a paid time off benefit for your employees.
Use this as a template and modify it to reflect the compensation strategy for your particular church.
If you would like to access an editable PTO Policy or FMLA policy simply log in to your account.
If you are not a member of SCM and you would like to access our forms you can see what forms and documents are included in our library here.
