MIXED EMOTIONS ABOUT MANDATORY PTO

Let’s assume that most companies’ intentions when implementing a mandatory time off program are generally good.  

In theory, mandatory time off promotes better work/life balance. It obliges employees to take a break and recharge their batteries. The thinking is that by doing so, employees come back fresh with new and improved focus on work. Subsequently, they’re more productive, efficient, and engaged in their jobs.  

Managers benefit too—knowing when employees will be out helps them better plan for the long-term. Colleagues, especially those with less tenure, also gain valuable experience when a co-worker is compelled to take time away—performing new duties, and learning new skills.  

The organization benefits from all of this, of course. And let’s be honest: The company can also take this time to evaluate specific roles and individuals and can get a lot of questions answered. Is this person’s job essential? Are they carrying too much of the workload? Not enough? Do we need to hire additional personnel for their department? 

For better or worse, the coronavirus pandemic has forced companies everywhere to give thought to the necessity of many positions. And the crisis has left employees feeling tremendous stress and in need of a break. As such, some organizations are implementing mandatory PTO, or are considering such a step.  

On i4cp’s June 11, 2020 Total Rewards Leader COVID-19 Response series call, rewards leaders from CoorsTek, F5 Networks, AdventHealth, OshKosh Corp. and many others weighed the pros and cons of compelling employees to take time off.  

‘A Lukewarm Reception’

Rena Freeman, VP of total rewards at AdventHealth, was among those on the call. She noted that AdventHealth implemented temporary, mandatory PTO usage for some employees over this summer, due to reduced volume of work.  

It hasn’t been an unequivocal hit, she says.  

“I would say that it’s been met with a lukewarm reception. People understand that it’s for budgetary reasons. And we’re trying to avoid furloughs by asking everyone to use their PTO time while [work] volumes are low. But the good reasons behind it don’t necessarily make people like it. They accept it.”  

Kelly Services, the Troy, Mich.-based office staffing company has considered mandatory time off for employees but hasn’t yet done so. 

Rather, Kelly is simply encouraging employees to take at least some time off now, for some much-needed rest, says Stefanie Exline, the company’s director of global mobility.  

“The fear is that everyone will wait until December to use their vacation time, when it’s a busy quarter for us,” says Exline, adding that Kelly’s time off policy generally does not permit carry over of vacation days into the next calendar year unless legally mandated.  

A Matter of Employee Perception

Mandatory PTO creates other concerns. For example, some employees simply won’t be thrilled about a requirement to use their vacation time during a global pandemic that’s preventing them from going on an actual vacation.  

Kelly Services recognizes as much. And, as part of the effort to encourage employees to use vacation time during the pandemic, the HR team periodically sends out companywide emails with employee-provided “what I did on my staycation” stories of how they’re spending days off at home (or near their homes) while travel continues to be restricted.  

There’s much more to consider, of course. Managers will have to be mindful of potential staffing issues and scheduling challenges, for example. And your organization’s PTO program must comply with state and local regulations. For example, some states legislate how employers must handle employees’ unused paid time off at the end of the year or when employees leave the organization.  

Such concerns can be addressed, though, and just underscore the importance of working with legal to draft a well-written PTO policy, and the need to track the usage of sick leave separately, in accordance to state and/or county laws.  

Ultimately, how employees perceive the organization’s motives might be the factor that you need to weigh most carefully when considering mandatory PTO, says Mark Englizian, senior strategy advisor with i4cp, chair of i4cp’s Total Rewards Board, and former global leader of total rewards at Amazon and CHRO at Walgreen Co.  

“Some will see it as the company reducing its liability for accrued PTO on the balance sheet. Others will see it was the company looking out for them, making sure they take time to recharge after a long and intense period. My counsel to anyone implementing mandatory PTO is to be honest with yourself and be honest with your workforce.”