Prospecting employees are naturally drawn to positions that offer a variety of benefits. Of course, medical coverage is a plus, but what helps employers to stand out is when they offer time-off incentives — including vacation time and sick leave.
Not all benefits include both vacation time and sick leave, and some may choose to offer one over the other. Regardless, employers must understand the difference between vacation time and sick leave. This doesn’t only affect how they run things in the future, but can also affect overall employee satisfaction and retention rate.
Vacation time, also known as paid time off (PTO), is an employer-provided benefit that allows employees to take time off of work and get paid for it. How an employee chooses to use their accrued vacation time is entirely up to them. For example, PTO is often redeemed for:
- Personal appointments;
- Personal days;
- Sick time;
The advantages of giving employees PTO benefits are that it creates more:
- Time flexibility;
- Workplace equality;
It also helps prevent employee burnout, which can ultimately affect their overall performance.
How to Accrue Vacation Time
Even though many employers offer PTO, how it’s earned varies. It is entirely up to the employer to choose how to give their employees PTO. Here are a few popular ways in which paid time off can be accrued:
- Accrual period: During a time-off-accrual period, employees can rack up PTO weekly, monthly, or yearly.
- Pay period accrual: Employees get a set number of PTO hours with each paycheck. Employers are encouraged to use a trustworthy time-clocking app to ensure employees earn the right amount of PTO for the number of hours they’ve worked. When establishing paid leave benefits, employers should consider whether or not employees are still able to earn PTO if they’re working overtime.
- Waiting period: It isn’t uncommon for employers to automatically give employees a set number of hours off after they’re out of their probationary/waiting period. A workplace probationary period typically ends after the employee’s first 90 days. However, even if they’re out of the probationary period, employers may still choose to hold off on giving PTO until the employee has been there for at least a year.
- Work bonuses: Companies may choose to use PTO as an incentive for their employees to go above and beyond.
It’s also worth mentioning that some employers may put a cap on the number of PTO hours employees can save up. While others allow their employees to hold on to their vacation time for as long as they want. Many hourly employees are also in charge of tracking their own PTO. This is why it’s important to make use of a PTO time-management solution to ensure they’re not going over the allotted number of hours they’re eligible to request off. Salary employees will need to discuss with their employer to verify how they’re able to accrue PTO.
Just as it sounds, sick leave is a type of paid leave that employees can take if they meet certain criteria. For example, if an employee — or in some cases someone in their immediate household — is sick, then they can take a paid day off to rest.
However, this doesn’t happen immediately after calling out sick. Most employers require that an employee shows proof of their sickness with a doctor’s note to get the day paid off. If they fail to provide proof, then most times, they will not get paid.
How to Accrue Sick Leave
Not every employer has to offer sick leave. However, certain states have specific sick leave laws:
- New Jersey;
- Rhode Island;
- Washington D.C.;
- Washington State.
States that have specific sick leave laws must abide by those regulations, whereas the states that don’t have specific regulations can set their own accrual methods. This could include some of the same accrual methods mentioned above for paid time off.
It’s important to note that not every employee, regardless of rules and regulations, is eligible for PTO and/or sick leave. According to the United States Department of Labor, “employees are eligible to take FMLA leave if they have worked for their employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles.” Typically, employees must also be full-time, unless stated otherwise, to be eligible for these benefits.
Although they’re similar, one of the many differences between vacation time and sick leave to note is that employees can use vacation time if they’re sick, but they can’t use sick leave to go on vacation. Regardless, both are valuable for employers and employees alike.