WEST PALM BEACH, Fla. - Sick days, personal days, vacation days..they're all the same under a paid-time-off pool. More credit unions are implementing PTO pools as they recognize the benefits they can have on employee morale and attendance. According to the Society for Human Resource Management Annual Benefits Survey, employers offering the PTO plan benefit jumped from 21% in 1998 to 68% in 2003. PTO generally places sick, vacation and personal leave days into one pool to be used throughout the year at the employees' discretion. Experts say the plan's appeal lies in its versatility-helping employers manage everything from streamlining administrative functions to keeping employees happy. According to CoastHills Federal Credit Union (formerly Vandenberg FCU) HR Vice President/HRD Network President Diane Lawrence, PTO can lead to some creative benefit opportunities. The Lompoc, California-based credit union made the switch to PTO in March 1994. PTO accrues on a daily basis through the credit union's Human Resources Information System. Full-time employees who work for one year accrue 18 PTO days and the credit union has a cap of 50 PTO days. In 2001 as an added value the credit union implemented a PTO payment program in which employees can request payment of 20 hours of available PTO in June and December. Last year Lawrence says the credit union kicked off the "Be There" attendance incentive program, which is a take-off of the popular FISH! Philosophy "Be Present" concept. Full and part-time employees who have an excellent attendance record and have no unscheduled absences during a quarter can receive up to eight hours of PTO per quarter. No Really, I'm Sick "No one ever wants to talk about it but sick days encourage employees to lie. Let's face it, many employees don't want to feel cheated out of something. Knowing the traditional `use it or lose it' policy regarding sick time, many use their sick days as mental health I-need-a-break days or I'm-entitled-to-it days," said Central Florida Health Care Federal Credit Union Administrative Services Manager Colleen Pendergrast. "It creates a Catch-22 of sorts where we give employees sick time but then get on their case when they do use it." To deal with what was becoming a growing absenteeism problem, Orlando-based CFHCFCU made the switch to a PTO plan in 1994. Under PTO employees constantly accrue paid-time-off days which can be carried over or cashed out at the end of the year. Holidays and bereavement days are not included in the PTO bank. The more years worked, the more time employees bank. For example, a full-time employee who has been with the credit union up to four years can accrue an annual 15 days and an overall PTO pool of 30 days. Five to 14-year veterans accrue an annual 20 days or an overall maximum of 40 days. Pendergrast says full-time employees who have completed one year of continuous service are required to take five consecutive days off in a year regardless of accrued hours-no exceptions. In addition, the credit union offers an Extended Leave Bank (ELB) of 4 days a year for full-time employees and an overall maximum of 50 days. Employees are required to keep at least 32 hours (4 days) in the ELB at all times. Offered as a way to look out for employees, Pendergrast says ELB is like a "rainy day" bank and ensures that even if employees use up all their time every year, if they suddenly need surgery they won't be penalized because they can use the ELB. According to Pendergrast, after making the switch, within a year sick calls were reduced by up to 64%. She says while a PTO program doesn't make real sick days any easier to schedule, PTO days are so valued that it tends to reduce the number of "questionable" sick calls and results in fewer unscheduled absences. "Most employees want to save their paid-time-off for vacations or cash conversion," said Pendergrast. "And the great thing is that the time is there for them to do whatever they want with it so the PTO has actually encouraged more conversations between managers and employees. So if someone wants to go to their child's field trip they can schedule that rather than maybe calling in sick because they don't want to use a vacation day." According to Pendergrast the biggest challenge in converting to a PTO is not only developing a fair program but also effectively communicating that any time away from work will come out of the PTO bank. "Don't assume everyone understands PTO. To have employees really embrace PTO you've got to constantly educate them that `sick days', `vacation days' no longer exists, it is all PTO because you want to make sure that employees understand that nothing is being taken away from them," said Pendergrast. She adds that the terms must be deleted from even paystubs. "If using an outside payroll processor, make sure the company is onboard with the PTO change and that verbiage on the pay stubs will or can be changed to reflect PTO instead of vacation and sick days-it will help the change go smoothly." With 50 employees and three different categories of time off Brea, California-based America's Christian Credit Union (formerly Nazarene CU) was ready for a change that would simplify its HR department's administrative burden. Since making the move to PTO this January, ACCU HR/Training Director Richard H. Mathews says it has not only made life easier but employees love it. "I think it helped that we were quite generous by offering 20 days of annual paid-time-off to regular full-time employees," said Mathews. "We simply showed employees that we added the old 10-day vacation, seven days sick and three personal days to come up with the 20-day PTO pool." According to Matthews, once employees understood that previously unvested sick time would now be vested under the new plan "it was an easy sell to staff and we've heard no complaints." To further facilitate the transition, ACCU also carried forward all sick time balances as of 12/31/02 to be used during an employee's unpaid medical leave. Once the sick balance reaches zero the account closes. Like other PTO plans, time accrual increases with length of service. The credit union has a cap of 40 days. Upon reaching that cap, time ceases to accrue. According to Mathews, staffers must take time off to drop that balance below the 40-day ceiling before time starts accruing again. "Time off is becoming more important to people than even pay raises," said Pendergrast. "One of the most popular questions potential employees ask now during interviews is `how much vacation do I get?' I think our PTO has helped us stay competitive and as we move forward it may even help us with employee retention." -email@example.com
More Credit Unions Wading into Paid-Time-Off Pool As Way to Combat Absenteeism, Boost Morale
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