7 Tips for Developing Your Company’s Paid Time Off Package

This article sets out several key considerations for business owners who are creating paid time-off packages for their first employees.


As a new business owner, you want to ensure that your first employees feel valued. After all, compensating your team fairly will help you ensure that they stay on long-term, which is a key aspect of employee retention. 


A strong PTO package can help with employee retention. When you’re running a small to midsize company, it can be difficult to figure out how much PTO you should offer, as well as what policies you should implement when it comes to time off requests or cashing out benefits. If you’re interested in other employee retention techniques, here are a few recommendations from Chris TDL Post to help you develop an appropriate PTO package for your business.


Design a PTO Document


No matter how you decide to structure your PTO policy, you’ll need to give your employees a clear, organized PTO document to have them sign on. Typing up a simple form won’t cut it - you’ll want to create a document that looks clean, organized, and professionally formatted. It should include space for the employee’s signature with plenty of room.


If you’ve put together a large PDF file document with several images, you might have trouble sending it out to remote employees through email or other typical communications channels. Because of the large file size, you’ll have to compress the file, which will make it easier to send properly. However, keep in mind that compressing a large file can compromise its structure and visual elements. Therefore, you’ll want to choose an easy PDF compressor tool that will allow you to resize the file without affecting the image, font, or content quality.


Consult a Legal Expert


The laws regarding PTO can vary from state to state. If you have any questions or concerns about your plans for your company’s PTO package, and you do not have a legal expert in-house to turn to, you may want to turn to an attorney who specializes in working with small business owners. They can help you ensure that every aspect of your PTO package complies with state and federal laws.


How Many Days?


As you think about your PTO package, the question of how many paid days off you should grant your employees is probably the first thing that comes to mind. To come up with an answer, it can be helpful to look at average PTO offerings from other companies of similar sizes. Hourly states that the average US business offers about 30 days of PTO, including paid holidays, personal days, vacation days, and sick leave. Therefore, if you want your PTO package to be competitive, you should aim to offer a similar number of paid days off.


Who Qualifies for PTO?


Naturally, you know that your PTO policy will apply to full-time employees. But what about part-time employees and contractors? Depending on where your business is located, you may not be required to offer PTO to part-time employees or contractors. However, if you have the ability to offer team members in these roles several paid days off, this would be a nice perk. 


Request Timeline


Before you implement your PTO policy, you might be wondering how you should structure the process for time off requests. You need to set a consistent rule for when time-off requests must be submitted. Sling states that you should require employees to submit their requests at least two weeks before the date in question. You could also establish a rule that employees cannot request time off during the busiest periods of the year. Furthermore, you can even create a rule concerning how many days off an employee can take in a given pay period.


Managing Complicated Situations


If you divide up your company’s options for paid time off, you might encounter confusing scenarios — for example, if an employee requests a week off for vacation over a paid holiday, what do you owe them? However, by creating a blanket PTO policy that includes paid holidays along with vacation days and personal days, you can avoid dealing with situations like this. A comprehensive policy makes it much easier to manage PTO. 


Cashing Out PTO


Whether or not you need to pay out unused PTO at the end of the year, or when an employee leaves your company, will likely come down to the laws in your state. If you are unsure of whether or not you pay out banked PTO, consult with a legal expert in your area.


If you can offer an attractive PTO package, you’ll be able to recruit more talented employees to your business. PTO is an important consideration for many job seekers today. By designing a PTO package that will allow your employees to enjoy a sense of work-life balance, you can support a happier, healthier workforce.