Dear HR Knowledge: With so many of our employees remote, we are finding that most employees are not using their PTO and are accumulating large balances. Can we force employees to use their paid time off?
In general, yes. Paid time off for the purpose of this question will refer to paid vacation, sick, or personal time; employers may require the use of vacation/paid time off (PTO) and restrict its use. Federal law does not require private employers to provide paid time off, however, many states and localities (and counting!) take a different approach. There are numerous states and cities that require employers to provide paid sick leave, and the provisions of these policies vary based on the statute. In addition to sick time requirements, many states have specific rules and restrictions on paid vacation if it is offered, such as carryover provisions and payout upon termination rules. Some states go a bit further, like Maine and New Mexico, where employers must provide paid time off that can be used for any reason, including vacation time.
Generally speaking, employers can require when employees may or should use their available paid time off. The caveat is that the employer’s policies must be clearly written, consistently applied, and be keep compliance with any state sick time or other paid time off provisions top of mind.
Employers want to ensure that their policies are not overly restrictive to allow employees to reasonably use the time they have accrued. Of course, you also want to ensure that you are allowed to apply restrictions where your employees are located. For example, in California employers must provide a minimum of a 90-day advance notice when requiring exempt employees to take mandatory PTO.
To balance state paid time off requirements while ensuring employees are using their time, the rule of thumb is to have a clearly written paid time off policy that is communicated throughout your organization.
Another scenario where forced time off can be an issue is during a business’ annual shutdown or a slow season. It is permissible to require employees use their paid time off during these periods, so long as it is done in accordance with sick time requirements and is administered consistently. Having a clear policy that is communicated ahead of time is paramount.
While the summer months are popular for time off requests, organizations may find that some employees never use their available time. In these instances, it’s reasonable to ask employees about their time off plans both from a department planning perspective, as well as an employee wellbeing viewpoint. It’s important to address this subject to ensure employees are using the time that is available to them in order to achieve a healthy work and personal life balance. If an employee feels that they are too busy to step away for a few days, consider helping them prioritize their work load and encouraging them to take time off.
We would be remiss if we did not address leaves of absence and the interplay of paid time off. Since leave statues at both the federal and state level greatly vary, there is no one size fits all approach. In general, when an employee is on a leave under the federal Family and Medical Leave Act (FMLA), an employer can require an employee use their accrued paid time off, but only if the employee is not receiving any other form of pay, such as short-term disability, state mandated medical and family leave, or other forms of compensation.
To ensure your paid time off policies align with regulatory compliance, the key is having a clearly written policy. Your policy should include all the details regarding how paid time off is awarded, how it may be used, when time must be used, as well as how unused time is handled at the end of the year and upon separation of employment.
There are a lot of moving pieces, and we would be happy to talk about how we can help get your paid time off policies in tip top shape!
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This content is provided with the understanding that HR Knowledge is not rendering legal advice. While every effort is made to provide current information, the law changes regularly and laws may vary depending on the state or municipality. The material is made available for informational purposes only and is not a substitute for legal advice or your professional judgment. You should review applicable laws in your jurisdiction and consult experienced counsel for legal advice. If you have any questions regarding this advisory, please contact HR Knowledge at 508.339.1300 or email us.DOWNLOAD PDF