Paid Sick Day Policy: Fertile Ground for Trial and Error

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It’s a fair question to ask…why should employers provide paid sick leave? As noted by President Obama in his recent State of the Union Address, not every employer does. According to the Bureau of Labor Statistics, 73 percent of U.S. employers provide paid sick leave to full-time workers, and 27 percent do so for part-time workers. Here are some of the arguments advocates put forth in favor of offering this type of leave.

  • Not paying for sick leave will motivate many sick workers to come to work and wind up spreading their sickness to others.
  • Sick workers are at higher risk of being injured on the job.
  • Workers without paid sick leave may defer seeking medical treatment and more often wind up receiving costly treatment in an emergency room.
  • Workers covered by paid sick leave are more likely to use preventative health services, thereby reducing the chances of greater future absences from work.

PTO vs. “Traditional” Formula

If you are already sold on the merits of paying employees when they are sick, the question arises: What’s a good policy? In recent years the PTO (paid time off) model has gained currency. A 2013 survey by the Society for Human Resources Management found that a narrow majority — 52 percent — of employers take the PTO approach, 34 percent use a basic “standalone” sick leave policy, and the rest have a hybrid policy. (Note: More than three-fourths of employers in that survey have at least 100 employees.)

The idea behind PTO is to avoid having to decide how many paid sick days to offer, and then to avoid policing employees for possible abuse of those sick days. With PTO you simply give employees an allotment of days they can be off the job and still be paid, regardless of the reason for their absence. Personal days are wrapped in with sick days and vacation days. Many employers with PTO plans also allow employees to “bank” unused time off, allowing others who need them to do so, but maintaining access to that “bank” for possible future use.

The Case for PTO

Additional arguments in favor of the PTO approach include:

  • Attendance recordkeeping is simplified.
  • Employees like the flexibility this approach gives them.
  • Removing the incentive for employees to be dishonest about the cause of an absence precludes a potential strain on employee relations.
  • Employees wind up taking more vacation days. This is good because vacation scheduling gives you a better handle on who will be coming to work on any given day, and employee vacations tend to enhance employee productivity when they’re on the job.

PTO does have potential drawbacks, however. For example, if employees burn up all their PTO on vacations and later get sick, they might feel forced to come to work anyway — the same problem that arises if you don’t have any paid sick leave.

Another concern, although perhaps short-sighted, is that the PTO model may result in employees being away from work more days than they otherwise would have been.

The degree to which that could be a problem, however, may vary according to the maximum PTO potential. An employee with a 15-day PTO allotment who consumes all of those days would have less impact than an employee who, under a traditional system, is entitled to four weeks’ vacation and five sick days, if that employee takes all the vacation days but none of the sick days.

Maximum Potential Days Off Comparison

Also, a survey by the WorldatWork membership organization reveals that the total PTO days offered by employers is less than the combination of vacation and sick days offered by companies with distinct allotments for sick days and vacation. For example, the median PTO allotment for employees with 5-6 years of service was 22, compared to a combined total of 25 for employees with the same tenure at employers with distinct allotments. Those numbers for employees with 11-15 years of service were 26 for PTO and 30 combined vacation and sick days.

Then there are employers with a high degree of confidence that their employees won’t abuse sick days and apply no cap to the number of sick days they can take. One percent of employers in the WorldatWork survey take that approach.

One such employer,, reports its policy results in lower absenteeism. Blair Cohen, an HR executive with the company, explained it this way: “What do you do when you are given five sick days? You use five sick days because they were “given” to you. However, when there is no established number of paid days off, employees must rely on their own judgment and time management, which in turn, means they will most likely take less time off and only use what is needed.”

That may require a leap of faith few employers are willing to take. But it’s a good demonstration that, in the absence of a federal paid sick day mandate, some employers like to think outside the box.

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