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PTO: Pluses and minuses

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PTO: one of the many acronyms whose meaning I was too embarrassed to ask. Now I know: it stands for paid time off—a comparatively new concept in human resources.

Headshot of Richard Smoley

Of course, most employers give paid time off in the form of vacations, sick time, holidays, and so on. What makes PTO different?

Today most employers allot certain specific amounts of time off. Here is one fairly standard breakdown for a given year:

• Paid holidays: 10 days

• Paid vacation: 10 days

• Personal days: 2 days

• Sick days: 8 days

• Total: 30 days

By contrast, PTO would give employees 30 days per year, to choose whenever they want, for whatever reason. You simply say you are taking X day off PTO, and that is that. Most employers require at least two days’ notice, although one would hope that allowances would be made for sudden illnesses and emergencies.

One advantage: “Employees are far more likely to be open and up-front with their team about when they need time off and this means that employers can schedule work streams better, reducing any unexpected absences,” according to a Wikijobs pamphlet on PTO. Paid Time Off Policy: Pros and Cons (

“As an employee, you would be entitled to use your time off at your discretion for whatever you choose,” continues the pamphlet. “You may want to take some time to look after a sick child or visit their school recital. You may want to be able to have a few days relaxing and enjoying hobbies, or you may need the extra time to help recover from a bout of poor health.

No more having employees calling in sick when they just want a day off. And healthy employees don’t lose out on sick days; they get as much time as those who have to take more time off for their health.

“Whatever your reason, with a PTO policy, your employer cannot decide what you use that time for. Having a paid time off policy shows that the employer has trust in you,” says the pamphlet.

I could see the benefits of this approach for the produce industry. Maybe a company has to operate on Thanksgiving or Christmas or another popular holiday. Employees could choose to work those days and take off some other day. This is not a small advantage, even for the employee: there are a lot of lonely people out there who don’t have anyone to spend holidays with and might be happier putting in a day on the job.

Typically, PTO is calculated by pay period. Employees who are paid bimonthly may get 1.3 days of PTO each pay period. Those paid semimonthly would get 1.25 hours each period, for a total of 30 days annually.

Disadvantages: an employee might take all 30 days at once for a long vacation. But later in the year, they fall ill and then have to take unpaid time off for sick days.

Also, as the Wikijobs writeup notes, traditional vacation packages may be more generous. This is particularly true in companies where vacation time is allocated according to years at the company, with new hires getting two weeks, gaining another week after three or five years of employment.

Note too that the PTO package above includes holidays. Christmas is no longer a paid holiday as such: if you want to take it off, it is PTO along with everything else.

Oh, by the way: employers who switch to PTO may offer less total time off on the grounds that flexibility in itself adds greater value.

But if I were an employer, I hope I would not want to implement PTO as a sneaky way to get more time out of my workers.


Richard Smoley, contributing editor for Blue Book Services, Inc., has more than 40 years of experience in magazine writing and editing, and is the former managing editor of California Farmer magazine. A graduate of Harvard and Oxford universities, he has published 13 books.