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A new way to take time off
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August 14, 1999: 10:21 a.m. ET
'Paid time off' benefits offer flexibility for workers, productivity for employers
By Staff Writer Nicole Jacoby
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NEW YORK (CNNfn) - If taking your son to the doctor or even painting your house seems as good a reason to take a sick day as any, you're not alone.
Thousands of Americans every year use their sick days to take care of family matters, run errands or simply to extend their vacations.
"Employees have come to think of sick time as a vested benefit, but that's not what it was meant for," Jack Curley, president of the New England Employee Benefits Council, said.
A growing movement among employers is aimed at reducing this kind of abuse, but it also promises to give employees more flexibility and control over how they use their free time.
"Some companies are doing it to save money. Others are doing it to be more family friendly," Curley said. "The two are not mutually exclusive."
The concept is "paid time off," or PTO. Instead of divvying up a set number of days for holidays, vacation and sick leave, employers combine time off into one bundled category. Employees who want a break from work simply take days from their bundle, regardless of the reason.
Accommodating a new breed of workers
This type of benefit is increasingly replacing traditional time-off plans, as companies seek new ways to attract and retain good workers, as well as accommodate the modern employee's busy lifestyle.
In a 1999 survey of more than 800 companies, 23 percent had PTO programs, compared with 20 percent in 1997 and 16 percent in 1995, according to the Hay Group.
The plans have been particularly attractive to working parents, whose professional obligations often make balancing work and family difficult.
"Because of the increase of women in the workplace, the balance of home responsibilities has changed for both men and women," said Colleen McMurray, senior consultant for William M. Mercer's health and group benefits division.
As a result, sick days are often used for far more than just illness, with employees using the time to deal with canceled baby-sitters or care for sick children and elder relatives. PTO programs aim to eradicate the inevitable dishonesty associated with traditional sick leave by giving employees more control over their time off.
"There is no value judgment associated with PTO plans," McMurray said.
PTO programs also level the playing field between family-oriented workers and their single, childless counterparts. Somewhat of a backlash has occurred among employees who don't benefit from work/life initiatives introduced by their companies, such as child care assistance, according to a study by consulting firm William M. Mercer.
"Some workers might resent the fact that they have to work overtime while their colleagues pick up their children from daycare or go to a PTA meeting," McMurray said.
PTO programs have the potential to eliminate such resentment.
"Everyone gets an equitable benefit and can use the time in a way that meets their personal needs, whether it's to trek the Himalayas or attend a child's school play," McMurray said.
Driving the trend
PTO programs are old hat in the health-care industry, a sector dominated by women and characterized by non-traditional work schedules.
Because those in the medical profession often are forced to work on holidays, the "paid time off" concept was a way to let workers decide which days they wanted off and reduce the amount of overtime paid, while still keeping staffing at peak levels.
Although health-care organizations still lead the way, PTO benefits now reach far beyond hospitals and nursing homes. The Hay Group study showed that paid time off programs now exist across many sectors, including manufacturing, retail, finance and service.
But PTO plans probably are best suited to companies that involve less traditional working days, says Curley. Companies that need to have customer service phones manned 24 hours a day, 7 days a week, for instance, he considers ideal candidates.
"These types of companies may be paying more time-and-a-half than they have wanted to pay," he said.
But McMurray believes PTO plans can work in almost any industry, especially since implementation varies so much. A bank that's closed on traditional holidays, for instance, can bundle its sick, personal and vacation days but leave company holidays in place.
Besides the office work/life advantages, PTO programs enable companies to cut excessive absenteeism and bolster productivity. If employees are able to be more up front about why they need to miss work, they may be able to reduce the time off required in the first place.
A worker who needs a few hours to take an elderly relative to the doctor, for instance, can work a half day instead of taking the whole day off by feigning illness.
"The employee gets what he needs and the employer gets a half day of productivity. Everybody wins," McMurray said.
A closer look
Implementation of PTO plans varies from company to company, but in almost all cases, time off for jury duty, bereavement and military service aren't included in an employee's primary time-off pool because they involve exceptional and usually non-recurring circumstances.
But under a PTO plan, paid time off can kick in where other benefits leave off. Employees can use PTO to extend their maternity leave or to take days in addition to the 3 usually designated for funerals.
Because PTOs often are aimed at decreasing abuse of sick leave, the total number of days usually is reduced when a PTO plan is implemented.
That reduction generally hurts only those who were abusing sick days in the first place. Employees who rarely or never take sick days actually are rewarded through the conversion, since they suddenly have personal time available to them that they weren't using before.
While most employees seem to prefer PTO plans, the implementation process sometimes can be difficult for them, says Curley.
"They can get unhappy at the conversion point if they feel they have lost something in the transition," Curley said.
Another issue is scheduling. In some cases, it may be difficult to get the necessary time off even though you may be entitled to it.
In those cases, the advantages of PTO depend largely on whether the company decides to pay the employee for unused time or whether leftover days will roll over to the next calendar year. 
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