This topic contains 2 replies, has 2 voices, and was last updated by Tim 1 month ago.
- November 7, 2017 at 8:04 pm #117256
Provide detail regarding the change to a pto plan . What are the positive and negative impact.
Currently on an anniversary date going to calendar.November 7, 2017 at 8:12 pm #117262
If you’re currently on an anniversary date for PTO then you already know the benefits of that. An anniversary date feels more fair to employees, and one of the benefits is you don’t have all that ‘time off’ on the books as a year end liability. PTO is spread throughout the year based on when the employee was hired. Of course, it takes some programming or a good payroll system to manage the data.
Offering PTO based on a calendar often hurts newer employees, especially those hired at year end, because if they don’t use it by Jan 1 they lose it. You may need to put in a rollover policy to deal with that. And with a calendar based program, if they’re working on a year end project, they may not be able to take PTO at all. Again, you’ll need to manage that. Also, using a calendar year for PTO also means many of your employees may wait and take time off at year end all at the same time. Yikes. That’s another thing for you to manage.
On the plus side, using a fiscal or calendar year requires only 1x a year accrual updates, PTO resets every year at the same time and it’s easy to monitor who has or hasn’t taken time off. You do all the PTO rollovers and calculate new balances at once, so you can send reminders to folks who still need to take their vacation time.
So in a nutshell, I think a calendar year program causes more work for HR.
Nonetheless I wish you luck with your conversion.
Laura, HRNovember 7, 2018 at 6:54 pm #227240
How would you transition to calendar year accrual from an anniversary allotment? Each employee currently receives their full allotment on their anniversary and we are looking to move to an accrual system beginning 1/1/19. I’ve been reading up on this and here is what I have found. In 2018, each employee will receive their full allotment on their anniversary. On 1/1/19, each employee would receive a prorated “Award” of PTO based on when their last anniversary was. For example; an employee who just received their full allotment in November would receive a much smaller “Award” on 1/1/19 than someone whose anniversary was back in February. This makes sense to me and puts everyone on a level “Playing field” beginning 1/1/19. The question is this: after 1/1/19 would each employee then begin to accrue at their full rate on each of their 26 paychecks in 2019?. A 120-hour PTO employee would accrue roughly 4.6 hours per paycheck. They would essentially have to accrue at their full rate on each paycheck in 2019 otherwise they will run out of PTO by the end of 2019 if they use all their PTO in 2019. The employees will feel like they are being penalized b/c the organization wanted to move to an accrual system. What are your thoughts? Tim
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