Traditionally, employers offered separate paid time off benefits to employees, such as paid vacation, sick leave and personal days.  In recent years, however, many companies have moved to a more flexible Paid Time Off or “PTO” benefit that incorporates all policies into one all-inclusive plan.

There are different opinions on whether employers benefit from offering PTO instead of the traditional plans.  If you are trying to design your future policy, here are some advantages and disadvantages of offering a combined PTO plan:

Advantages of a PTO Policy

Disadvantages of a PTO Policy

Regardless of which plan you choose, you may want to put incentives in place for your employees to actually take time off, for instance a “use it or lose it” clause, or a cap on accruals so that if time off is not taken, then no more time can be accrued.

Also, keep in mind that these are optional benefits, but once they are in place, the company will have to abide by its own rules.  When an employee leaves, the company will have to pay for any accrued, unused vacation or PTO time.

Source:  HR Support Center