Employers can choose to offer individual silos of time-off categories (i.e. sick time, vacation time, etc.) or may choose to offer a paid time off (PTO) policy that combines vacation, sick time and personal time into a single bank of days or hours.
Sick, personal and parental leave
Employers may choose to offer specific “banks” of sick time, which may or may not differentiate between sick time, personal time and parental leave (to care for a sick family member). The most common benefit to offering sick time separate from vacation time is the fact that employees who are sick will be less likely to come to work if they have a separate bank of sick time to use when experiencing an illness.
There are pros and cons to offering combined PTO versus separate vacation and sick leave “banks,” as outlined in this article.
If an employer does not offer generic PTO, they may instead choose to offer designated vacation time for employees. Vacation time offered to an employer can vary based on organizational policies, length of employment and job performance.
Some organizations, such as Netflix, are choosing not to formulize a vacation plan and track time. This model may not work for all organizations, but for some, this model has proven successful as it gives employees a more flexible schedule, which tends to increase productivity.
There are pros and cons to time-off plans.