Should Your Vacation Policy Include a PTO Bank?

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In a typical vacation policy, most employers allot a set number of paid days off for employees to take vacation, sick leave, and personal leave. However, paid time-off banks (PTO banks) are becoming a more popular type of vacation policy.

A PTO bank is a benefit in which distinctions between vacation, sick leave, and parental or dependent care time off are eliminated. For example, instead of granting an employee 10 vacation days, 5 sick days, and 3 personal days in a vacation policy, a company with a PTO bank vacation policy would provide the employee with 18 paid days off to be used for any of those purposes.

The biggest employer benefit of this type of vacation policy is that PTO banks tend to minimize unexpected absences. PTO banks also fit nicely into a basic philosophy at many companies to provide employees with flexibility and individual choice.

Learn More about Different Types of Vacation Policies
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The HR Library has more helpful vacation policy resources like these:

Sample Vacation Policies
Vacation Laws by State
Choose your words carefully in your Vacation Policy
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