Friday, 25 February 2022 15:31

PTO Policies to Consider for Your Small Business Policy Manual

PTO policies spell out how much paid time off your employees will get each year, what the PTO can be used for, and how it is earned and approved. Some businesses have different PTO policies for vacation and sick time while others provide a block of time that employees can use for any reason. There are no federal laws requiring PTO, however, businesses will have a hard time attracting top employees without a well-thought-out PTO plan.

It’s important to offer an attractive PTO plan to your employees as the modern workforce largely recognizes work-life balance as a top priority ( Without a solid PTO plan in place, your employees are more at risk for burnout which can ultimately jeopardize your bottom line.

Which Type of PTO is Best for Your Small Business Policy Manual

Companies small and large can offer one of three PTO policies: a traditional, flexible, or unlimited policy. Choosing which one is right for your business can be difficult as you have to balance the needs of your workers with the needs of your business. The most important thing to ensure as a small business is that the work gets done while your employees have the time they need to enjoy their personal lives.

Vacation and Sick Time

Traditional PTO is when your employees' days off are sectioned into specific categories such as vacation, sick leave, and personal days. Traditional PTO is often earned over time and provides incentives for employees who have tenure at your company. As such, this PTO policy may encourage employees to stick around to reap the benefits in the future.

The main downside to traditional PTO is that employees might feel limited in their options and misreport their time off to keep their balances from going over. Additionally, employees may not want to wait a year or more to be able to take paid time off.


Where traditional PTO segments how many days an employee has to use for sick, vacation, or personal days, a flexible PTO framework allows employees to choose how they use the lump sum of their time off.

This can be an attractive option to employees who are parents and need to take a day off for something like a school function or sporting event. It can also be helpful to people who want to celebrate holidays that are not on the federal holiday calendar.

A downside to this policy structure is determining how to set the annual cap for each employee.

Unlimited PTO

Another type of policy to consider is unlimited PTO. This framework allows employees to take as much time off as they want as long if it doesn't interfere with the business needs and they receive prior management approval. This initiates a positive work-life balance right from the get-go and has become widely popular across many industries.

Additionally, it's important to implement procedures to ensure employees are completing their work and not taking advantage of the policy.

Get Help Creating a PTO Policy for Your Small Business in Denver Today

Hiring an HR consultant is the best way for your business to grow and succeed. At CourtSide® Consulting, we have decades of experience in the HR industry, and during that time, we have created custom business solutions for small, large, and medium-sized businesses across the U.S. Our skilled consulting team will conduct a complete audit of your organization to identify the most effective ways to improve your culture and support your business goals.

Contact CourtSide® today to get your small business policy manual updated and upgraded.