Managing your small business can be difficult and stressful without the proper tools. There are many factors that go into keeping the doors open, beating the competition and having a fully trained staff.
For most businesses, keeping track of the hours that employees work becomes a tedious task without using something like timesheetportal.com. The alternative of leaving timekeeping undone can cost your business millions in over payments and possible government fines.
Along with the decision to improve time tracking, you also want to choose the best paid time-off policy for your business. Although you are not required to under the Fair Labor Standards Act, doing so can improve recruiting and retaining the best workers.
Calculating hours employees can have off might seem daunting. However, there are ways to accurately calculate how time is accrued each year.
Typical Ways Accrual Rates Work
While there are a lot of different ways to calculate the rate at which time-off is accrued, you should choose what works best for your company. This could mean a yearly accrual for employees who have been with you for years. However, this means employees must wait a full year before taking days off.
A gradual accrual typically works best and can be earned daily, by hours worked, twice a month or bi-weekly. When employees can take off for vacation, doctor’s appointments or any reason will vary based on work schedules and department needs.
Selecting a PTO Policy That’s Right for Your Company
There are three basic PTO policies that can work with how you decide to calculate accrual rates:
- Traditional
- Flexible bank system
- Unlimited
Traditional PTO offers sick, vacation and personal days with separate allowances for taking each. This policy rewards employees who remain with your company for many years. The risk with this type of policy is inaccurate reporting for the type of days off an employee uses.
Flexible bank system does not break up time-off into separate categories. Instead, employees are given a lump sum that they can use at their discretion. The only requirement is to get the time-off approved by their manager.
Unlimited is becoming more popular among tech companies and allows employees to take off from work whenever they want. They never reach a cap, but will still need to get approval from their manager.
There are pros and cons to the different PTO policies you can implement. Evaluate your business needs, as well as employee needs to choose which policy works for your company.