Paid time off benefits can provide employees with the opportunity to take sick days, vacation time and deal with personal matters by choosing how and when to use their bank of hours.
This bank of hours combines sick days, personal and vacation days and requires employees to use banked hours for any paid time away from work.
The advantage of a paid time off policy, as compared to traditional sick time and vacation time accruals, is that it provides employees 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 they use 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.
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 use of those hours are for more serious and long-term illnesses.
Example PTO/EIB Policy and Accrual
Purpose:
To ensure full 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 employee can use for sick, vacation, or personal days.
Extended Illness Bank (EIB) Sick hours employee can use for extended (more than 3 days) illness.
Full-time Staff (FT) Employee who works 40 hours per week.
Regular Part-time Staff (RPT) Employee who works a minimum of 24 hours per week.
Irregular Part-time Staff (IPT) Employees who work less than 24 hours per week.
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.
Exempt accrual is based on a 40-hour workweek.
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 and less) and other personal days.
PTO hours do not accrue beyond the allocated annual accrual rate and unused banked hours rollover 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) accrues based on hours worked.
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:
Since banked hours are dollar valued, this needs to be a budgeted benefit.
Employees should be required to request time off by using a PTO request form and approval by immediate supervisor.
When an employee is on an extended medical leave a doctor’s letter confirming illness and duration of leave should be required.
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.
***Please note that this is not to be construed as a legal document, please consult a legal professional for specific use and language for your organization.
