2022.04.14 Accrue PTO on Hours Worked vs Hours Paid

WHAT IS THIS SETTING?

When creating a Paid Time Off (PTO) policy, admins have the ability to decide if they want employees to accrue PTO hours only on hours worked or on all hours paid.

• This setting applies only to Flexible PTO policies.
• Selecting “No” means that employees will accrue PTO only on hours worked.
• Selecting “Yes” means that employees will accrue PTO on all hours paid, including PTO hours paid.

HOW DOES IT WORK?

Let’s demonstrate how the setting works with an example:

Sharon normally works a 40-hour workweek. For every 40 hours worked, she accrues 1 hour of PTO. On a given week, Sharon takes 16 hours of PTO (2 days). Her paycheck will still reflect that Sharon is being paid for her regular 40 hours. If the setting is set to “No”, Sharon will accrue PTO hours for only 24 hours. (40 hours paid - 16 hours PTO = 24 hours actually worked.) In this case, 0.6 PTO hours will be added to her PTO balance.

If the setting is set to “Yes”, Sharon will accrue PTO hours for all 40 hours paid, even though she actually worked for only 24 hours. In this case, she will accrue 1 hour of PTO.

WHEN IS THIS SETTING AVAILABLE?

This setting was released in April 2022. 

Customers who had a flexible PTO policy in place previous to April 2022 will have the setting set to “Yes”. If desired, customers can update their PTO policy and turn the setting to “No”.

Customers who created a PTO policy after April 2022 will have the setting set to “OFF” by default. If desired, customers can change the setting when first creating a PTO policy, or in the future by updating their PTO policy. 

TO UPDATE AN EXISTING POLICY:

1. Click on “Policies” in the left-hand navigation
2. Click “Create new policy”
3. Edit the policy details you want to change, including the setting to allow employees to accrue PTO on all paid time
4. Click “Create PTO policy”