Figuring out days-off policy no vacation

Question: Our primary care practice consists of four doctors, one nurse practitioner and 14 employees. We are revisiting our personnel policies and are trying to decide whether we should change our vacation/sick-leave benefit to a paid-time-off benefit. What are the pros and cons of each?

Answer: Many medical practices that we work with are considering this topic. In doing so, there are some main points to consider: the conversion from the traditional paid vacation/sick/personal time benefit to the new paid-time-off (PTO) program; employee buy-in, and the cost to the practice to manage this program.

Like traditional paid-leave benefits, PTO hours are accrued on a regular basis (usually every pay period) and can be based on the employee's length of employment. To convert from the traditional benefit to PTO, you must first determine what time is to be included in the "bank" of hours. Typically, PTO includes vacation, sick and personal time. Holidays are left outside the bank, since the office is usually closed on those days, and it would not be beneficial for an employee to work on that day if not needed.

If your current benefits provide the two- to five-year employees 10 vacation days, five sick days and two personal days, does this automatically mean that the PTO benefit should be 17 days? Not necessarily. Not everyone takes every day of sick time. Therefore, you should look at the staff attendance history to determine the average amount of time taken by employees during a year.

If the average amount of sick time per employee is four days, then you might want to consider establishing a 16-day PTO program. Other decisions will have to be made, including how much time can be carried over into the following benefit year, whether the PTO hours will be used for doctor appointments during the day, and if and how the benefit ties in with the short-term disability benefit.

PTO is appealing to prospective employees and often gives your practice the competitive advantage if applicants see that they have the opportunity to have more paid time off than that offered by another employer.

A lot of employees find the idea of PTO very attractive. It provides them the opportunity to manage their own time off. For employees who never get sick, it provides them with some extra paid time off that they normally would not get under the traditional benefit program.

A potential downside is when an employee plans for a 10-day vacation and ends up getting sick for several days and has to use part of the PTO hours he or she had set aside for that vacation.

On the surface, managing PTO seems much easier than orchestrating vacation, sick and personal days. But this might not be the case.

PTO works best in an environment that allows for flexibility of work schedules. It also seems to work best with salaried rather than hourly employees.

You could implement a policy requiring minimum advance notice before taking more than a certain number of consecutive days off. But employees who already tend to abuse sick time might really take advantage of PTO and potentially take every PTO hour on a day-by-day basis, instead of planning ahead.

An employee on the PTO plan might reconsider a decision to take off the day because of a slight headache or sniffles, if trying to accumulate PTO hours for an upcoming vacation.

A problem with PTO is that employees who are trying to accumulate PTO hours for future use might come to work when they are sick and possibly contagious. This is particularly inappropriate in the medical practice setting, regardless of the employee's position.

At first glance, it appears that PTO is less costly because typically practices end up giving employees the same or fewer days than with the traditional benefit programs. This might not end up being the case. Now, employees look at PTO as vacation time instead of a combination of sick and vacation time.

With traditional benefit programs, employees who do not use any or all of their vacation time by the end of the benefit year lose either all or part of the sick days' wages. Clearly, this is a cost savings to the employer.

With the PTO program, those employees who never used sick time before are using those days toward vacation time.

Furthermore, in most states, employers are required to pay out PTO, like vacation time, when an employee leaves the company. Because PTO includes more than vacation time, it could cost the employer more than a traditional program would.

PTO can be a powerful recruitment and retention tool. But it also can lead to abuse. When making the decision regarding PTO, be sure to consider the culture of your practice and whether it would be practical from an operational standpoint.

If you decide to implement PTO, you should make sure you have policies and procedures to manage the program effectively. These should include establishing specific guidelines for requesting PTO.

Every employee should be required to take a vacation of at least three days during the year. This policy is recommended not only for the health of the employees, but also to be an internal control recommendation.

Most important, do not let the PTO program run the practice.

You and your office manager must continue to manage the staff. PTO is just one tool among many available to help you maintain a productive and efficient practice.