PTO combines sick days, personal leave and vacation time in one “bank” at which workers can deposit and withdraw. That makes more sense than old-fashioned sick leave, which can encourage employees to call in sick because it’s an easy way to skip work, especially when unused sick leave vanishes at year’s end.
While PTO plans differ, a typical program allows full-time employees to accrue PTO from their first day on the job. They can withdraw from their PTO bank for any absence, from vacations to family caregiving to short-term illnesses that don’t fall under the Act ( ). A supervisor preapproves all PTO requests.
Some employers let workers exchange any unused PTO time at a set rate, such as 75% of their base pay. Other options include rolling over unused PTO from year to year, up to a limit of, say, 40 hours, or setting up a reserve bank for long-term illnesses.