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Paid and Unpaid Personal Leaves

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Submitted By sweth
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When an organization is recruiting and wanting to keep that employee for a long time in that company, then the benefits it is offering such as employee leave and for how many days it is willing to pay for personal leave is very important. Employers offer employees leave in many forms such as vacation, sick time, personal time, paid time as a part of benefit package. These policies really make a difference. They develop a positive working relationship between employee and employer and also increase the commitment of the employee towards the organization which leads to more profits, promotes good working habits and help human resource manager to easily keep track of the employee attendance. This research paper is about paid and unpaid personal leaves for employees. These leaves are not under leave of absence laws. They are not required by the federal law to be granted to the employees and they are purely given by the company as a benefits package or bonus. In the body of the paper, I will discuss about the definition of these days, main goal of these leaves, number of days, rules and regulations on how to use these days, a new policy being introduced in many organizations known as PTO (Paid Time Off Policy) to benefit employees and managers in the place of paid personal leave, benefits and disadvantages.

Paid Personal Days
These are the days paid by the employer to the employee as a part of comprehensive benefits package or given at the request of the employee or some legal contract made by the employer with the company while joining, when the employee takes time off from the work.
The main purpose of these days include activities such as * Employee injury on the job * Parent- teacher conferences * bereavement * Voting * Family-holiday party * Visiting health care professionals * Jury duty * When the employer is making changes or repairs to the company building * Other activities in the building
The above mentioned purposes are just an example. These days are just that personal and the employee can use them according to his own choice.
Number of Days:
The number of paid personal days is generally earned by employees based on years they worked for the organization and their level of position in the company. Some companies give these days without any discrimination between the employees. Every employee get the same number of paid personal days. Hours of these days are often increased over the calendar year but most of the companies allow employees to use these days in the respective calendar year before accumulation. The salary for these days is paid at an employee’s normal base salary or hourly wage. As discussed above, these days are normally apart of employees benefits package and the package also include other paid days such as sick days, vacation days and public holidays. So, as a part of this package, companies offer two to three personal days a year.
Every company has their own guidelines on how employees may use these personal days. These include the process for requesting, when employees can use them, when the manager approves and doesn’t approve the leave. Some of these are discussed below: * Give an advanced notice as possible except in an emergency situation * The manager approving the leave depends on the situation of the team he/she is working and the organization. * All the days have to be used in the respective calendar year. * If an employee leaves the company, then the number of personal days that were not used will not be eligible for payment by the company. * When an employee would like to take leave for sickness, vacation etc., paid personal days should not be used because they were already granted by the company as a separate package.
Paid Time Off (PTO):
Now-a-days organizations are using a new policy known as paid time off to keep the paid personal days simple. It became difficult for a manager to keep track every day separately like how many sick days have been used or how many vacation days, personal days etc., So they opting for a paid time off which combines sick days, vacation days and personal days into one single store of days and the employees can use them at their own choice. This policy is becoming more popular in the field of human resource management as they are more flexible and the company need not decide how many separate sick days, vacation days or personal days to be allotted. It can just determine the number of PTO hours to be granted every year.
Purpose for PTO:
The main purpose is to make the plan flexile and to reduce unscheduled absences. These days can be used for all needs such as vacation, personal or family illness, doctor appointments, school, voluntary work, any work of his/her personal choice.
Number of days:
The number of PTO days offered by the company to the employee replaces all the vacation, sick and personal days that were allotted at the time of joining. But, the number of vacation days accumulated since the date of joining will be added to the PTO days. Some companies allow carrying the paid vacation days that were not used into the next calendar year. Number of days allotted depends on the length of service. So, PTO is directly proportional to length of service. According to Amy Nourse of the TechSmith Corporation the sample number of hours offered are given below – Number of PTO days | Working hours per year | Rate of hours | 1-2 | 144 | 2.7693 | 3-4 | 152 | 2.9231 | 5-6 | 160 | 3.077 | 7-8 | 168 | 3.2088 | 9-10 | 176 | 3.3847 | 11-12 | 184 | 3.5385 | 13-14 | 192 | 3.6924 | 15-16 | 200 | 3.8462 | 17+ | 208 | 4.0 |

Sample statement for the above table - 1-2: 144 working hours per year, earned at a rate of 2.7693 hours for each full work week in a calendar year.
The number of days offered also changes according to the rules of a state or country. In United States, as this paid time off policy is not a federal law and is granted as per the company rules they have to make sure to make a legal contract with the employee while joining without the scope for any problem in the future. Some of the states of United States have different federal laws. They are – * In California, vacation days must be provided by the company as per the legal labor law. The unused days must not be ignored and should be paid at the end of the year or employment termination. * In Massachusetts, when an employee is fired by the company then they have to pay for all his vacation days if they were used or not. * In Pennsylvania, there is no labor law to pay for all other days apart from company’s basic salary but they have to pay to the employee if they promised any paid leave days at the time of joining.
In other countries other than United States, there are some federal laws. In Western European Countries, companies have to offer minimum number of paid vacation days as per the law. Most of the employees receive at least 30 days paid time off per year. * In Brazil and Lithuania, 30 days of paid leave plus 11 Federal holidays – a total of 41 days. According to Brazilian law, employees must utilize these days all at a single time or can use them at 2 times. * In Canada and China, employees are offered 19 and 21 paid time off days respectively. * In France, employees must receive 30 total paid time off days every year. Most of the companies are closed for two to three weeks in August every year and the 30 days also include these shut down days.
Employees can take 80 hours of PTO accumulated over into the next calendar year. They should take care that their PTO accumulated is not lost when the respective calendar year ends. This is only a special eligibility of PTO and so not every employee can do this. This is monitored by a human resource manager and he will say whether employees can use them in the next year or not. If they cannot carry over this into the next year because of certain circumstances in the company, they can use them in the next half of the calendar year with the approval from their team manager or department head and human resource manager. Employees are paid for PTO same as like paid personal days, at the end of employment. If any employee uses PTO that was not yet accumulated and he resigns for the job, then the amount will be deducted from the final payment. Employee who notifies the company that they were leaving must work those last days without using any PTO. Employees who join in the company again after their termination will be allotted PTO based on their previous work service to the company.
Guidelines for PTO: * Employees have to request for PTO by filling a form specifying the reason for leave before 2 weeks except in an emergency situation. * Those reasons must be proper and your supervisor approves them based on the needs of the company. * Only full time employees have the eligibility to accrue PTO which does not include interns, contract or temporary employees. * As the paycheck is calculated for every 2 weeks of a month, then the PTO not utilized is also added into the PTO bank. * PTO cannot be taken in the time period when unpaid leave, workers compensation leave, disability leave are taken. * The other leave days that are not covered into the PTO include military leave, jury duty, and bereavement leave.

There are some exceptions for PTO. They are – * Employees who use more than three unplanned days, they have to submit a doctor’s report to the human resources department. If not, they are not allowed to continue work. * If any employee uses all his PTO and would like to take leave for some more days, this may lead to dismissal of the employee and those days will not be paid. They require the approval from the president of the company. * Employee has to use all his PTO earned till date before asking for an unpaid leave. * The disciplinary actions that are taken by the company if the employee take leaves without permission from their manager are:
1-2 incidents – no action – just coaching from the supervisor
4th incident – verbal warning
5th incident – written warning in the employer’s file
6th incident – employment termination * Any employee who uses more PTO than what he has earned without giving any notice to his manager may lead to have his employment terminated and other disciplinary actions will be taken. * According to company’s Family and Medical Leave Act policy (FMLA) all the PTO has to be used before using the unpaid FMLA.

Benefits of PTO:
There are many benefits from introducing PTO policy starting from attracting employers to easy handling of employee records for human resource managers. Some of them are: * As PTO does not distinguishes between paid sick days, paid vacation days or personal days this policy can be an attractive benefit for employees because they can get more vacation time under a PTO plan. * So, the employee plans from the beginning regarding when to use his PTO and will give an advanced notice to the company about his leave without doing this at the last minute. * This makes the company to plan about whom to use to make the work around the employee absence. * This policy attracts younger workers more as they can enjoy both their personal life and work at the same time. * Employees who give notice to the company before two weeks when they are leaving the company, they are paid for all unused PTO also. * According to a survey, employees are taking planned short vacations in the United States after introducing this policy.
Disadvantages of PTO: * This policy can be seen as a drawback by the employers because they have to pay the employees for hours not worked which is a loss. * Because of PTO, employees tend to take short frequent vacations which do not appear good to the eyes of the employer. * In order to use the PTO at a single time to go on a vacation or some other planned family program, employers are not using their holidays even when they are sick. They are coming to work which may infect other employees, loss to the company. * Some employees who did not use their PTO in the whole year are using those days at the end of the year just to get paid even though they do not require leave. * To prevent this, employers are paying unused PTO at the end of the year or upon employment termination.
One of the major issues of PTO is that sick people not taking leave. Employers have to handle this and make sure that employees utilize the PTO correctly. The things they can do to keep this under control are: * First of all, before introducing this policy ask all the employees whether they are interested in this or not. * Make sure to explain all the guidelines to the employees. * If an employee comes to work when they are sick, send them home. Employer has the right to take that action and reduce those hours from the allotted PTO.

Changes in the Workforce:
A survey was conducted by WorldatWork on about 1000 organizations ranging from small scale to large scale which concludes that usage of PTO plans by the workforce have been increased. In 2002, about 71% of the organizations were using normal paid time system which includes separate personal days, sick days and 28% were using PTO system. In 2010, there was a wide change in these values, the normal paid time system decreased to 54% whereas PTO system raised to 40%.
This survey also indicated that managing PTO plans in large organizations have become difficult because only 32% of the employees in large organizations are using this system and 51% in small scale organizations are using this PTO system. In companies with less than 100 employees, 48% have PTO bank plans.
There is also a different in the type of organization. In Education Industry, 97% of the employees are using normal paid time plans and 3% are utilizing PTO plans whereas in Health care and Social Assistance industry, 80% of them are using PTO plans.
This percentage also depends on the status of the employee also. 23 % of full time employees are using PTO plans whereas only 9% of part time employees have eligibility to use these plans.
These figures say that organizations are tending to use PTO plans on the whole.

Unpaid Leave:
This is also known as Leave Without Pay (LWOP). This is opposite of Paid time leave such as sick days, vacation days and also different leaves such as suspension, indefinite leave. Unpaid leave is something that an employee takes time off without being paid.
Some companies do not allot employees paid sick days, vacation days etc., In such cases employees request the employer for the leave. Employees also request for unpaid leave if they have used all their paid time off and they are in a situation where they desperately need leave. In such cases, it purely depends on the manager and the company policies. Granting the leave also depends on the business needs of the company and the position level of the employee.
Many Governmental organizations have policies on how to allot this unpaid leave to the employees. These leaves are generally handled with in their departments and there are some situations when this leave is granted easily such as medical emergencies or if the employees have a period of service in uniformed services.
This leave is also granted by the company itself to the employees when they are suffering from budget issues. To reduce the costs, they grant leave to those who have not taken leave from a long time. They just ask them to take a temporary leave and when everything is fine they are asked to work normally. This does not come under personal unpaid leave.
Many political institutions have used this trick while handling budget issues. An example of this was happened in February 2009 in California. When the state cannot handle the economy, it asked employees to take two days leave without pay every month. This helped the Government offices to save themselves from the budget crisis.
In all organizations, employees can know their unpaid leave policies by checking their employment handbook or by contacting the human resources manager. This policy varies for every other company as it is not a federal law.

This research topic is a part of leave of absence laws. The part I have covered is not a law that should be followed by all the organizations but these leaves are also important for every employee. In this paper, I have covered about personal paid and unpaid leave, the situations when these leaves are granted to the employee, guidelines on how to utilize these leaves, advantages and disadvantages of paid leave, about paid time off policy being used in organizations in the place of traditional paid time systems, the number of days allotted in United Stated and also discussed about other countries like France, Brazil, China and Canada.
By doing research on this topic, I have learned about the laws for the leave of absence and how the companies attract employees by introducing new leave policies as a part of benefits package. The guidelines that are being followed by the organizations regarding these leave are very generous and they do not show any partiality towards either the employer or the employee. Employers are willing to pay the employees even for the hours they are not working to satisfy them. So, employees should also consider this and work for the well-being of the company. In my opinion, companies can also increase paid time leaves for the employee who works hard for the company.
(i) (ii) (iii)…...

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Sick Leave

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