If there’s anything we know about 2021, it’s that we don’t know what’s coming. The COVID-19 pandemic has and continues to challenge HR managers, employers, and employees with unexpected twists. While many teams have already adapted to remote work, digital HR processes, and creative employee engagement tactics, now may be the time to revisit existing PTO policies.
Why now? As COVID-19 rages on, we’re getting used to cancelled plans, vacations, and events. These changes and cancellations are impacting the way employees take time off. For most, it means employees are taking far less PTO — whether it’s in hopes of rolling vacation time over and saving it for safer times, using it less out of guilt due to other distractions while working from home, or simply out of fear of losing their jobs. As an HR professional, you may be wondering if you should adjust paid vacation policies in response to the pandemic, and how to do so. To get the inside scoop, we reached out to employers near and far to understand what changes they’re anticipating or making due to the current circumstances.
PTO Policy Changes through COVID-19
If your business isn’t currently offering PTO carryover, this could be the time to re-evaluate. PTO carryover means that a set amount of accrued and unused PTO time can be rolled over from one year to the next. Because many employees are staying home and minimizing travels, their PTO runs the risk of going unused or wasted. Allowing employees to roll some of that time over could be a great relief to your employees.
Jim Pendergast, SVP of altLINE, says, “To avoid everyone taking off in December and January, many will likely alter PTO to carry over into Q1 or Q2 of 2021. Given the budget went unused in 2020, this carryover shouldn’t cause any sort of financial burden.”
Trond Nyland, Founder and CEO at Cordless Drill Guide has also revisited his PTO carryover policies due to the current situation. “I have allowed carryover of PTO up until March 2021. I usually don’t agree with carrying over PTO but 2020 is not a usual year.” Flexibility is key!
Limit PTO That Will Carry Over
Now that we’ve offered the option of carryover, let’s discuss limitations you can put into place that might make sense for your business. Though it may not be a popular decision among your employees, limiting the amount of PTO hours that can carry over into the new year may be necessary for budgetary and scheduling reasons. If this is a route you choose to take, make sure to expect feedback from employees, and try to be as reasonable as possible.
Pay Out Unused PTO Before 2021
An alternative approach to carryover is paying out unused PTO at the end of the year. Paying out employees may seem daunting, but:
- This can help minimize the chances that all of your employees take vacation at the same time next year.
- You can choose to do this while also allowing some amount of carryover, or decide to pay out fully.
- At a time when many employers are looking for ways to give back to employees, it can be an easy way to show appreciation in times of hardship.
Arnold Chapman, CEO of ELDFocus.com, is getting ahead of the curve and has made PTO adjustments to navigate the difficult situation. “Since there’s a possibility of having unused PTO by the end of the year, we make sure to get everyone out. This way, we have ensured that nobody is itching to take long vacations,” he says.
Teo Vanyo, CEO & Founder of Stealth Agents, is taking a similar approach. “We offer either to pay out unused PTO at the end of the year or to carry over a capped number of hours into the next year. This way, we ensure that we don’t end up with the majority of our workforce taking long vacations at the same time next year,” he adds.
Consider Compulsory Days Off
Many of your employees may not see the need to take time off when their options for vacation are limited. Even so, it may make sense for your business to require mandatory days off in efforts to reduce the number of PTO that has accrued this year. Chapman notes, “We understand that during this period, it can be hard to persuade people to take time off. However, we have reduced the amount of accrued PTO by asking our workforce to use it. Our team made sure that anyone shouldn’t be working when they’re not supposed to.” As an HR manager, your job is to help remind team members not to feel guilty when taking time away.
Consider Unlimited PTO
In addition to considering mandatory days off, unlimited PTO policies may look like a great option. We currently offer unlimited vacation to our employees at GoCo — and many modern companies do the same! Some major pros of PTO include:
- Attractive for hiring and retaining talent
- Conveys cultural commitment to work/life balance
- Reduces administrative burden
- Eliminates the need to pay out accrued PTO
- Incentivizes team members to make the most of their work time
Dan Bailey, President of WikiLawn, states, “We found that the unlimited PTO policy made our workers much more productive, in fact, and we’re definitely going to be keeping it going into 2021.”
“Use It or Lose It” / Limit the Amount of PTO Accrued
Though the “use it or lose it” approach might receive backlash from employees, this might be an option you consider given your business circumstances. Limiting or completely removing the amount of PTO that employees can accrue or rollover encourages employees to take time off that they may not take otherwise. It’s extremely important to communicate and to listen to employees when taking this approach, though.
Bret Bonnet, Co-Founder & President of Quality Logo Products, says, “Traditionally we would pay out unused paid time off at the end of the year, but this year we are slower than normal due to COVID-19. As a result, we are forcing all employees to ‘use it or lose it’.”
Shayne Sherman, CEO of Techloris, warns, “If this [limiting PTO accrued] is something you have to do, try to make the limit as flexible as possible and consider making it a brief change to counter the challenges of the pandemic only.”
It is, however, important to remember that if you do decide to limit the amount of PTO accrued, you run the risk of having an overwhelming amount of requests in December. This may be okay for some businesses, but might not be feasible in others.
Give Vacation Priority to Essential Workers
While some of your employees are working remotely, others may be required in the office, plant, or field due to their job duties. In mixed cases like these, you may want to consider giving vacation priority to essential workers to minimize the possibility of your workforce being out at once.
Holly Zorbas, Assistant Editor at Credit Donkey, says, “We’re going to create some sort of priority system since we can’t have everyone out of the office at once and still run a flourishing business.” Again, communication is key. Make sure you listen to your employees, and create a clear communication plan.
Have Managers Set an Example
With the job market so uncertain, your employees are nervous to take any time off in fear of being made redundant. A great way to encourage your team to take time off as needed is to encourage managers to lead by example. For Vanyo of Stealth Agents, this meant changing requirements around managers’ PTO. “We introduced mandatory days off for managers during 2020 to clear at least 50% of their hours and not carry them over to 2021,” he states.
Managers can be a healthy example for employees to follow. If your staff sees that managers can take time off without feeling guilty and overworking themselves, the team is likely to follow.
“I try to lead by example with my team, by taking time off around the holidays to decompress, even if I don’t have a vacation or activities planned,” says Allie Collins, Director of Marketing at GoCo. “I also keep tabs on how much time my team members have taken, and actively remind them to take a day here or there if they haven’t in a while. I think the encouragement helps to mitigate some of the guilt around taking days off while working remotely.”
Incorporate/Increase Mental Health Days
This year has been extremely stressful for your workforce. From fears about job security to blurring boundaries between work and play, your team could use more self-care time. David Galownia, CEO at Slingshot, comments, “The pandemic has been hard on everyone’s mental health. That’s why we’ve updated our PTO policy to include mental health days. Just like paid-sick leave, Slingshot employees can take a day to stave off burnout and rest their minds.”
Adding mental health days can actually increase productivity and give employees the breaks they deserve.
Revisit Emergency Leave Policies
Through the Families First Coronavirus Response Act (FFCRA), certain companies can provide their employees with Emergency Paid Sick Leave (EPSL) or Emergency Family and Medical Leave Expansion (EFMLEA) for COVID-19 related reasons. In addition to this, businesses and HR managers may also want to revisit their own leave policies to help employees during the pandemic.
Chapman of ELDFocus.com adds, “Our team has taken into account what happens if our employees will be infected by the coronavirus. We have also considered if their family will also get the virus. Our company has updated our emergency leave policies to help everyone deal with the infection and everything that came with it.”
Managing PTO Policy Updates
Now that we’ve highlighted how a variety of businesses are changing PTO due to COVID-19, let’s discuss how to manage it all. Implementing a modern PTO management system like GoCo can help streamline any updates, from carryover settings to policy updates.
Updating Carryover and PTO Settings
In the GoCo platform, users are able to set up annual carryovers with the click of a button.
- Evaluate and activate the Vacation policy.
- Click “edit” to change the vacation policy from Unlimited PTO to Accrued Time Off.
- Set your Base Accrual Rate, accrual hours, and policy start dates
- Update your Tenure Accrual Rate if applicable to your business.
- Set-up and enforce a Maximum Balance if applicable.
- Choose your Annual Carryover options! You have the option to adjust specific amounts of hours and limit carryover amounts.
Adjusting Policy Documents and Communicating Changes
If you’ve made the decision to make amendments to existing PTO policies in the COVID-19 era, you will need to make sure all changes are reflected immediately in any policy documents your team can access. With modern HR software like GoCo, documents can be updated in minutes with new custom fields, e-signatures, acknowledgements, and more.
GoCo’s Magic Docs feature allows you to:
- Send and resend documents in seconds
- Update document content and easily make text changes
- Add custom fields, e-signatures, etc.
- Auto-archive older versions of your policies
- Send documents to many people at once
Once you make the decision to change your PTO policies, you just need to send a company wide policy update communication, and your employees will all be in the loop!
When it comes to evaluating PTO policies during the pandemic, there isn’t only one right answer. As an HR manager, your job is to understand what changes best fit your organization from a financial and mental perspective. It is important to consider what is fair to your employees, while also being sensitive to business needs. If you’re ready to start making changes to your policies but aren’t sure how to do so efficiently, take a tour of GoCo today to see how we can help streamline these processes!