Why Establish Time-off Eligibility And Accrual Schedule

Establishing a time-off policy is a major benefit most employers give to their employees. You should outline the specifics of the time-off policy to ensure it will not be abused by the employees and that it will be implemented fairly to all employees. Clearly communicating the time-off policy will also eliminate questions from employees. The first item to decide on for your policies is the time-off eligibility. Then, decide how much time each employee shall accrue.

The time-off eligibility date will determine when an employee can either begin accruing time off or when they can begin using their accrued time-off. For example, some companies begin accruing time-off from an employee's hire date, but the employee is not allowed to actually use that time off until after a 90-day probation period.

Next, you will set up an accrual schedule. Employee could accrue time off by number of hours worked or by receiving a lump sum during set time periods. An accrual schedule could look something like this:

For those employees with 0 to 5 consecutive years of employment will receive 23 PTO days a year;
5 15 consecutive years of employment will receive 27 PTO days a year;
15+ years of consecutive years of employment will receive 32 PTO days a year

By clearly outlining when an employee can expect to receive a bump in their PTO days and how this time will accrue, you will save your organization a lot of confusion and questions about when employees can expect to receive time-off and how much paid time off they can accrue.

Perhaps your organization wants to keep the different types of paid time off separate, such as specific accrual rates for vacation time, sick time and holidays that the company will observe. A good database will help you keep track of the days that employees accrue and use for each type of paid time off.

However your organization decides to establish the time-off eligibility for your employees, it is important to have the time clearly defined and written down in a policy so that there is less confusionthere will always be questions about how time is accrued or banked, but as long as your organization has a clear policy when employees are eligible for time off and how it is received, then your organization will be thankful for your clear communication.