PTO Policy Changes We Can Expect Amidst COVID-19

The pandemic is affecting the way employees take time off. Here are ways to offer an updated PTO policy that is fair for your workers and also meets your business’s needs.


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Is it time to rethink your vacation and PTO policies?

I bet your small business’s PTO policies didn’t have a pandemic clause in them, right? No one really considered something of this magnitude to be a possibility, therefore companies of all sizes have been left scrambling to adapt.

As the original concerns around sheltering in place order have subsided, business owners are now turning to secondary issues stemming from the new normal work life under COVID-19 like paid time off — or PTO — policies.

Read more: The PTO Guide: Everything You Need to Know to Create a PTO Policy for Happy, Engaged Employees

Since Americans are still banned from many countries and unnecessary travel is still highly discouraged, people are taking way less vacation time than usual. According to our own data powered by Zenefits, workers at approximately 3,000 companies put in about 63,000 vacation requests for April and May — about half as many as the previous spring.

Since the country’s travel situation likely won’t change in the near future, business owners have the critical time they need to rethink how their PTO policies can adapt to the changes brought by COVID-19 in a way that’s fair for their workers while also looking out for the needs of the business. Here are a few things to consider along the way.

Cap PTO that will carry over into 2021 (but check state laws)

One way to address the accrual of PTO hours that are racking up while people are spending less time traveling than any other time in recent memory is by capping the number of hours that can be carried over into next year. This option is something that usually has regulations on the state level, so be sure to check what’s possible in your area.

Naturally, this could be an unpopular option with your employees who might be banking on their hours to carry out a vacation they’ve already planned. Perhaps it’s a vacation they’ve already postponed because of the pandemic. If you don’t consult your employees in the process, you should expect some backlash.

Pay out unused PTO at the end of the year

Whether this goes along with capping what can carry over into next year, or it’s simply a stand-alone policy that resets (some) PTO hours at the beginning of each year, consider paying out any unused PTO at the end of the year.

This way you don’t end up with a workforce that could be itching to take long vacations at the same time, nor do you penalize your employees for a pandemic that is far, far outside of their control.

Consider mandatory days off

It can be hard to convince people to take vacation time to not go anywhere, but one approach to reducing major amounts of accrued PTO is by requiring your employees to use it. The key here, though, is to make sure that your employees aren’t working when they’re supposed to be on vacation or made to feel guilty for being away, especially when it comes to nonexempt employees who are entitled to overtime.

Even with exempt employees, asking or expecting them to work while on vacation is pretty much a surefire way to ensure that the talent you’ve worked so hard to recruit, hire, and train will start looking elsewhere where they can at least have a true vacation day.

Limit the amount of PTO that employees can accrue

Again, this is a change that has high chances of being an unpopular move with your employees, especially if your company has been amenable to workers accruing a big chunk of time off and using it for an extended vacation or other long-term needs away from work (think taking care of a sick family member).

If this is something you have to do, try to make the limit as reasonable as possible and consider making it a temporary change to weather the challenges of the pandemic only.

Give vacation priority to essential workers

Once this is all over and travel resumes, your employees may rush to take vacation at once. You’re going to have to create some kind of priority system since you can’t have everyone out of the office at once and still run a successful business.

One way to think about structuring that system is to give any essential workers who put their lives on the line during the pandemic vacation priority. Hey, they have earned it and it should be a hard stance for any decent person to argue with.

Expect managers to lead by example

Any change you expect your lower level workers to adapt to is something you should also expect management to adapt to, not only in the name of fairness but to ensure they’re leading by example as effective leaders do.

If mandatory days off are the way you go, for example, start by having your managers take them and not work during the days they’re off in order to set the right example for everyone who follows in their footsteps.

Update your employee handbook accordingly

Whatever changes you decide to make, if any, should promptly be reflected in your employee handbook. This way everyone has access to the most up-to-date information about the rules and expectations at your company, and also ensures that the employee handbook you worked so hard to create doesn’t become obsolete.


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