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It's Time to Evaluate PTO Benefit Policies and Make HR in Your Practice More Productive (Part 1)

For Dental, Optometry, Veterinary and Medical Practices

Evaluating Your PTO Part 1

Let's talk paid time off. Along with health insurance and retirement plans, it's one of the three most desirable benefits, according to employees. Competitive paid time off (PTO) benefit policies attract top talent to your dental, optometry, veterinary, or medical practice. It's that simple. 

Not all PTO benefit policies are created equal though. A good policy combines vacation, sick time, holidays, and personal time into a single package. Your employees — dental hygienists, insurance coordinators, physical therapists, veterinarian assistants, opticians, you name it — can request time off for all kinds of reasons:

  • A family bereavement. 
  • A best friend's wedding.
  • A vacation in Hawaii (It's nice this time of year).

Paying someone for not working might sound like a strange concept. But it's a tried-and-tested healthcare HR policy that works. PTO increases productivity in your practice, for starters. (Fifty-eight percent of employees with little work-life balance feel irritable!) PTO also improves engagement and reduces burnout, which has a positive impact on patient care.

One single PTO benefits policy doesn't fit all dental, optometry, veterinary or medical employees, though. You need to offer the right balance of vacation, sick time, and personal time depending on the culture, conditions, and circumstances in your practice. You should also consider federal and local laws that mandate paid time off. (This makes things more complicated than they should be.) 

So settle in and let's take a deep dive into PTO benefit policies — and clear up the confusion once and for all. 

PTO Benefits Policies: What's the Law?

Evaluating Your PTO Part 1

Let's start with what you can and can't do. The Fair Labor Standards Act (FLSA, for short) is probably the most important piece of legislation for PTO. The FLSA doesn't require payment for any time not workedfederal holidays, vacations, bereavement, sick leave, anything. (There are separate provisions for employers in certain industries, but healthcare isn't one of them.)

So the federal government doesn't require you to offer PTO at all. This means you don't have to offer PTO to a dental assistant who wants to attend his sister's wedding. Or a veterinary assistant who wants to travel around Guatemala for 2 weeks. 

But most practices do offer some kind of PTO benefits package...

Things get more complicated at the state (and even city/county) level. California, for example, requires all employers to offer paid sick leave. No ifs. No buts. Here are the basics for California:

  • Employers have to provide 24 hours of paid sick leave per year.
  • Employers allocate paid sick leave on an accrual or lump sum basis. (We’ll explore what these terms mean in a little bit.) 
  • Berkeley, Emeryville, Los Angeles, Oakland, San Diego, Santa Monica, and San Francisco have more generous sick leave rules.

It's messy. It's complicated. We recommend you talk to a healthcare HR consultant who can make sense of PTO for you.

(Quick note: Family and Medical Leave Act, or FMLA, provides for unpaid sick leave, but that's another topic for another day.)

Recommended Reading: About California’s Sick Leave Laws: Rollover vs Lump Sum

What About PTO Benefits Policies For New Hires?

Evaluating Your PTO Part 1

So what benefits should you give new dental, optometry, veterinary, or medical practice employees? 

Our opinion: 

  • Offer the required benefits at first. (Check local laws).
  • After 6-12 months, start thinking about benefits like PTO and vacation time.

PTO and vacation time are awesome benefits, but they are pricey and disruptive to small and medium practices. For some practices, PTO has become even more disruptive because of the current pandemic, where dentists, optometrists, veterinarians, doctors, and nurses continue to provide essential patient care. 

In states with mandatory PTO benefits policies, employers need to pay out accrued and unused PTO  when employment ends. Offering other benefits like paid vacation time becomes an HR headache. Again, a quick chat with a healthcare HR consultant provides much-needed clarity.

What About Different PTO Benefits Policies For Different Employees?

No law says you can't do this. But laws prohibit you from favoring certain employees in your practice. (It's called discrimination, and we've written extensively about it on our blog.) Giving special treatment to some employees could result in an expensive lawsuit. 

Stay on the right side of the law and build an objective set of metrics for allocating benefits. 

Consider:

  • Years of experience
  • Responsibilities
  • Other benefits received

Use whatever metrics that make sense for your practice. 

Whatever you do, communicate your PTO benefits policies clearly to all employees. We recommend a customized employee handbook, which doubles up as a reference manual for employees and legal defense if someone tries to sue you. (Yes, this happens.)

OK, So What About All-inclusive PTO Benefits Policies?

All-inclusive PTO benefits policies consolidate mandatory sick leave and vacation benefits into one policy. This approach has pros and cons:

Pros

  • Easier to track. 
  • Employees won't feel obligated to use hours because you pay accrued/unused PTO at the end of employment (or the end of the year if it's a lump sum allotment) in some states. 

Cons

  • Because you pay accrued/unused PTO (including sick leave) at the end of employment, you can't implement a "use it or lose it" policy in some states.
  • It's difficult to discipline employees for absences. You need a robust absence request system, detailed handbook policy, and extensive documentation. 

Want to offer unpaid leave? Check out this guide.

Recommended Reading: Holiday Pay 101: Myths and Realities About Employer Responsibilities

PTO Benefits Policies: Separate Sick Leave and Vacation

Evaluating Your PTO Part 1

Separate sick leave and vacation policies require two autonomous paid benefit "banks" — one for sick leave and one for vacation leave. Again, there are pros and cons:

Pros for Separate Sick Leave and Vacation Benefits

  • Because sick leave and vacation are separate, you don’t have to pay out accrued/unused sick leave because it's not considered an accrued wage. 
  • Because vacation is a "fringe benefit" (an extra benefit that supplements an employee's salary), you have flexibility on how vacation is accrued and requested. You still have to pay accrued vacation time upon separation (or year-end if it's a lump sum allotment), but you don't have to offer any vacation time to employees. (In some states, your only legal obligation is paid sick leave.)

Cons for Separate Sick Leave and Vacation Benefits

  • Employees can use sick days when not ill because there's no paid sick leave. 
  • It's more difficult to track two separate policies. You'll need help with HR for Health’s time clock that tracks hours like benefits earned, hours used, and automated year-end payouts.

Final Word

Offering the right PTO benefits package is difficult. You need to navigate national and local laws, decipher confusing jargon, and make complicated calculations. It’s easy to feel overwhelmed. In part 2 of our guide, we discuss the different accrual of benefits methods you can use in your practice. Come join us!

Read Part 2: It's Time to Evaluate Your PTO Benefit Policies (Part 2 — Accrual of Benefits)

A competitive benefits package attracts and retains talent in your practice, but you need the right HR tools like time tracking and attendance sheets, one-click payroll, secure document vaults, and consulting services to mandate and maintain your PTO benefits policies. This is where HR for Health comes in. Schedule a call, phone (877) 779-4747, or email compliance@hrforhealth.com to learn more.

About HR for Health

HR for Health is one of the nation’s leading Human Resources Management Systems (HRMS) used by small to mid-sized practices. HR for Health is an all-in-one HR software solution dedicated to helping the dental, optometry, and veterinary industries. Our human resources platform features all the tools practice owners need to manage payroll, timekeeping, 401(k), and more with total integration and ease.

Whether you’re looking for HR support for a small business or you’re a large group dental practice, HR for Health has the solution to fit your practice and budget. Reach out to an HR for Health account representative to learn more, today: Book Time Here

 

Quick note: This is not to be taken as legal or HR advice. Since employment laws change over time and can vary by location and industry, consult a lawyer or HR expert for specific guidance. Learn about HR for Health's HR services.

 

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