The Standard Workplace Policy on Paid Time Off

workplace, PTO, Policies

PTO (Paid time off) programs and policies have the capacity differ drastically from one company to another, taking on a personality as individualized as the organization instilling them. The most common uses of paid time off are personal time, sick time, vacation time, and paid holidays. PTO is very different from unpaid time off where the employer doesn’t not compensate the employee. You can read more about the different paid and unpaid time off types by clicking here.

Standard Vacation Policy

A question I often am asked is there a standard vacation policy? The answer is yes and no. Vacation policies depend on a number of different factors including:

Your company culture.

  •  What type of culture do you have in your organization?

Industry standards.

  •  These are important as some industries dictate certain time off and vacation expectations. For example, the tech industry is known for crazy perks, unlimited vacation time and very robust parental leave practices.

Geographic and state standards and laws. 

  • These are important in your very specific geographic market. Are there state or city laws that require you to offer certain amount of vacation or time off? In some cities and states, the answer is yes, laws exist that will require you to offer certain vacation and time off policy minimums. However, there are geographic expectations depending on your location. Maybe a city or location offers an extra floating holiday for after Labor Day because there have a very seasonal resort environment. I experienced this in the Lake of the Ozarks, Missouri which has NFT Day the day after Labor Day. NFT for those that are wondering was a celebration of the end of the busy tourist season. Local celebrated at bars that had liquor left over from the busy season. NFT was short for no f*cking tourists.

Current economic market. 

  • The current unemployment rate, competition for the position you are hiring for and your organization plans for growth as well as the overall economy will influence your PTO and vacation policies.

Generally speaking full time employees are given at least 2 weeks of vacation time after working for an employer for 12 months. This amount traditionally increases over time depending on your tenure with the organization.

What is Sick Time?

The general intention of sick time is to be used when an employee is too sick to do their job, thus needing to stay home and take time off to recover. Sick time is generally unplanned. Vacation time is generally planned ahead of time and allows an employee to take time off of work as a break. Generally personal time falls somewhere between sick and vacation time. It may be planned or unplanned and used for things from doctors appointments to mental health days to family emergencies.

Common PTO Policies

Some companies will categorize PTO into banks by the various types and then allow for a certain amount to be used from each bank (example: 5 sick days, 10 vacation days, 4 personal days, 1 floating holiday and 8 specifically assigned holidays.) Other companies others may choose to alot for one all-encompassing PTO bank system that may include all of the subtypes (example: 19 days of PTO to be used as needed for vacation, sickness, and personal reasons, 1 floating holiday and 8 specifically assigned holidays.)

Many organizations have begun using the all-encompassing system as it encourages their employees to use their PTO more honestly and in some cases more sparingly. When an employee is allotted a certain amount of time, uncategorized, they may be more likely not to call in sick when they are actually well, in order to save that time for a desired vacation. These types of programs also tend to eliminate any discrepancies between employees and employers about what qualifies as sickness, personal time or something else.

Unlimited PTO

A new trend that seems to be on the rise is the allocation of Unlimited PTO. In many work environments it has been found that an employees are actually more productive when they are not confined to a standard eight hours of work a day, 40 hours of work a week. They may be better suited to work 4 hours one day, 10 the next, or 25 hours one week and 50 the next. Because of this, more and more employers are taking the approach that as long a work is being completed and completed well, they don’t care when time is taken and they don’t care what it is taken for. This enables employees to move around their hours to suit their productivity as well as empowers them to control their own work environment. Many employers who have adopted this approach have seen higher productivity levels and happier employees.

On the opposite side, it is often argued that unlimited PTO often results in employees using less PTO than if they were afforded a traditional PTO plan. There is a greater expectation of work getting done that may then cut in to actual vacation time taken, or detract from the vacation time taken all together.


It is also becoming more common that when hiring new employees, employers will actually require them to take a paid vacation (generally two weeks) prior to starting their new role. This is called a “pre-cation” and is common in the technology industry. Not only does this practices help attract new talent, giving this time allows and employee to take time between their former job position and their new role to refresh and reenergize. Employers who’ve adopted this practice want their new employees to take the time for themselves so they are better able to come in ready to hit the ground running, not feeling tired and worn from their previous job.

There are arguments both for and against the pre-cation. While it is a nice thing to have before starting into a new role, it has also been argued that it is an indicator of an overworked work force. In addition to that, there are people who believe that giving an employee something like this on the front end may then imply that the employee owes the employer something once they start their job, setting them up to continue to be overworked and overstressed, even maybe more so than they were going into the whole situation.

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Jessica Miller-Merrell

Learn more about Jessica Miller-Merrell, SPHR, SHRM-SCP, the founder of Workology, a workplace HR resource, and the host of the Workology Podcast. More of her blogs can be found here.


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