Transition from annual PTO dump to bi-weekly accrual

We currently give employees their full PTO balance on their anniversary date (or after 90 days for new hires) and only allow employees to carry over 40 hours of PTO each year. We have had several people quit soon after their anniversary forcing us to pay out large sums of PTO. Due to this we are considering a change to an accrual system.

Does anyone have advice for making this transition? Those with an accrual system do you have a max amount you let them accrue or how much do you let them carry over each year?

I appreciate any insight on this topic. Thank you! :)

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  • I am not sure exactly how they handled the transition because I wasn't here yet but I believe they started the accruals and then gave so much time to use the remaining vacation they had before PTO.  We did that at my last company too and it worked well. You could also offer to cash out the vacation as well. We don't start with a set amount in new employees PTO banks (we are thinking of changing this so new employees have some time right away). 

    We accrue bi-weekly.  Our current PTO max level is 1040 hours. I know that is high. It used to be 2080!! So, basically with the PTO, they just keep accruing until they reach the max so there isn't really a "carry over," it just keeps accruing. When they near the limit, they cash out some so they don't end up losing any. It works really well. It's hard for new employees with nothing in there to start, though. We also offer a PTO cash out option and has to be in increments of 8 hours (system issue) and we also have a PTO donation policy for employees to donate to each other. I can give you more specifics on our accrual schedule if you are interested. Both places I work(ed) prefer the PTO over the traditional vacation/sick leave/etc.  Let me know if you would like more details and I can send you the policy.

  • We accrue bi-weekly, but separate our sick and vacation time. Employees are paid out vacation they have available and accrued upon termination of employment, but not sick time. We do have a max of 720 hours for sick (we do not offer short term disability coverage) and allow employees to accumulate up to 2 years worth of vacation time (this would be 4 to 6 weeks of vacation) before they stop accruing time. 

    My husband's employer front loads their vacation time and they get the full balance at the beginning of each calendar year. HOWEVER, they actually accrue it bi-weekly and if an employee uses all of their vacation by June 30, decides to leave and hasn't actually accrued the time, they have to pay the organization back. This also allows the organization to control how much vacation they pay out to employees upon termination.

    • Jean Heffron
    • Director HR @ General Tool Company
    • Jean_Heffron
    • 5 yrs ago
    • Reported - view

    We give employees a base PTO on their anniversary date and then they start accruing additional PTO for hours worked.  We do pay out any earned but not used PTO at termination (not for cause) but we restrict that to those who have been employed for a certain period of time.  In our old policy they had to have at least 1 year of service as of the time of their departure.  In our new policy that will probably change to 5 years. 

  • Hi Amie, 

    Our PTO (sick and vacation) is accrued once a month and depends on your years on the company. Our plan goes from Feb 1st to Jan 31st and you can only carry over 40 hours. We also allow employees to "borrow" one month of PTO balance in advance.  We pay all due balances at termination. 

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