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What is PTO?: A Guide to its Role in the Workplace

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Paid time off, or PTO, is one of the most important scheduling concepts. If you manage a company in the restaurant or grocery industry, you’ll have to carefully consider giving time off when planning employee schedules. Understanding what PTO is and how it works in various situations can help ensure that all your employees’ needs are being met.

What is PTO?

As the name implies, paid time off is when an employee does not have to go to work but still receives their normal pay. PTO is available to most full-time employees, and companies generally provide a set amount of PTO for each employee per year. PTO helps to ensure employees have an appropriate work-life balance. By allowing time off work without losing money, companies ensure their employees are mentally, physically, and emotionally healthy. A robust leave policy, along with a clearly-defined attendance policy, can help you create a more positive workplace environment and improve overall productivity.

PTO is a general umbrella term that refers to all sorts of paid time off. Some companies may further divide paid leave into various categories, such as:

Vacation Days

Vacation days are PTO that employees use when they plan on taking a break for fun. People may use their vacation leave to go on holidays, visit family, or attend special events. Some people will also use vacation days for any other time they need a break. Employees can take this type of time off without having to provide any reason; however, they usually have to request it in advance.

Sick Leave

Sick leave is PTO that employees can take on short notice for very specific reasons. To use sick leave, an employee usually needs to be ill, injured, or the only caretaker for an ill or injured child. If a company offers sick leave, they typically require employees to provide some sort of proof. This may be a note from a doctor or a bill from the hospital.

Official Holidays

If you run a business that closes on federal holidays, like Memorial Day or Christmas, you might want to give employees PTO for these days. This type of leave gives employees a holiday break without making them lose pay.

Other Types of PTO

Depending on your employment policy and your local laws, you might need to offer employees other types of paid time off. Some companies may use bereavement leave, which is PTO for after an employee loses a loved one. You may also want to consider parental leave which provides PTO for parents right after they welcome a new child. Other potential reasons for time off include jury duty, voting, and military leave.

Your Guide to Creating a Good PTO Plan

There are all sorts of ways to address PTO in the workplace. First of all, you have to decide if you want to split paid leave into categories like vacation leave and sick leave. More and more companies are actually skipping this step. Some grocery industry giants like Walmart just provide general PTO and allow employees to use it at their own discretion. This gives employees more flexibility, but it also means they tend to end up taking more time off since they can use what formerly would have been reserved for sick leave as vacation.

Who should receive PTO, and how much?

Next, you have to think about who gets PTO. Almost all companies provide some form of paid leave to full-time workers. However, when you have a lot of hourly workers at a small grocery store or cafe, you might not have many full-time employees. In some cases, it can be beneficial to give even part-time workers a small amount of PTO, simply because it boosts morale. You also need to think about any local or state requirements, especially during COVID, which mandate a certain amount of leave.

It is also important to consider how many hours of PTO that employees get and how they gain them. The amount of paid leave can vary depending on factors like state law and your type of business. For grocery stores, a common arrangement is two weeks of PTO a year. However, you may want to allow employees to accrue more PTO as they work at your company. For example, employees might gain one hour of PTO for every four days of full-time labor.

What should you do with unused PTO?

Finally, you have to think about what happens to the PTO if it is not used. Some stores just have unused leave vanish at the end of the year, but others may let employees roll over extra PTO to the next year or pay period. Many companies, like Kroger, pay unused vacation time as a lump sum payment when an employee leaves the company.

How to Properly Manage PTO

Handling PTO yourself can be a little overwhelming, especially if you have more than a handful of employees. It requires you to keep track of each employee’s individual PTO and adjust their amount of available leave as they accrue more or use it up. Even if you’re a relatively small store, it can be easy to get confused or stressed out by having to track PTO yourself. Therefore, many business owners prefer to work with software that manages PTO for them. A good labor management system can make allocating PTO almost effortless. It can also prevent you from scheduling too much paid leave during your busiest times of year.

At TimeForge, we provide highly configurable PTO tracking that works the way you need it to. You can assign different leave policies to various positions, and our software will automatically calculate holiday pay and PTO. With our seamlessly integrated employee communication tools, it is also easy for workers to request time off or provide doctor’s notes for sick days. TimeForge also provides a variety of other helpful tools for the modern-day business owner. Our platform includes employee scheduling, time and attendance, and task execution tools. With our predictive sales analysis, we can help you schedule exactly the right amount of staff for busy times and slow times. We also integrate with POS, human resources, and payroll software, so you can handle every part of your company. Get in touch with us to see how TimeForge can help you!

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