Massachusetts Paid Family Medical Leave

What is Paid Family Medical Leave?

Paid Family Medical Leave establishes a system for paid family and medical leave benefits for employees, independent contractors, and self-employed persons who work in the State of Massachusetts. Effective January 1st, 2021, employees can take up to twelve weeks of family leave to care for a family member and up to twenty weeks for your own illness during a benefit year. The maximum combined amount of paid family and medical leave an employee can take is capped at twenty-six weeks per benefit year.

What circumstances are covered Individuals able to take leave?

Covered employees are able to take Paid Medical Leave to deal with their own serious medical conditions. Separately, individuals covered by Paid Family Leave have the option to take leave for the following reasons:

  • To care for a family member who has a serious health condition (not until July 1, 2021)
  • To bond with your child during the first twelve months after the child’s birth or the first twelve months after the placement of the child with you for adoption or foster care
  • To deal with any qualifying exigency arising out of the fact that a family member is on active duty or has been notified of an impending call or order to active duty in the Armed Forces
  • To care for a family member who is a covered service member with a serious injury or illness incurred or aggravated in the line of duty

How is Paid Family Leave funded and collected?

Both employees and employers contribute to the Paid Family Medical Leave fund by collection and payment of payroll contributions. Note: Employers should begin collecting this tax by July 1st, 2019.

The contribution rate is equal to 0.63% of the maximum taxable earnings ($132,900.00).  Contribution rates will be determined each year based on the projected benefit costs for each benefit year. The Massachusetts Government website features a handy visual aid and breakdown of how contribution rates can be split between employee and employer.

Employees can be deducted up to 40% of the total medical leave contribution required for an individual AND up to 100% of the total family leave contribution required for an individual.

All employers who employ one or more individuals OR issue 1099s to more than 50% of your workforce are subject to Paid Family Medical Leave guidelines and must submit a quarterly file of contributions on behalf of covered individuals.

If you employ less than 25 employees or covered individuals, you are required to submit the employee contribution per law guidelines but are not required to pay the employer portion of the contribution. On the other hand, if you employ more than 25 employees, you must submit employee contributions and pay the employer share of the contribution.

The average number of employees will be determined by counting all full-time, part-time, seasonal and temporary employees for each pay period and dividing by the number of pay periods in the previous calendar year.

Exemptions: If you currently provide or contribute to a private family and medical leave plan, you can apply for exemptions under the state offered plan.

Note: StratEx has worked with our tax system partners (Symmetry and MasterTax) to ensure that this accrues systematically and that we have an efficient solution for filing.

Employee Notice

Employees are required to provide 30 days notice to their employers detailing the anticipated start date of their leave, the anticipated length of their leave, type of leave, and the individuals expected return date. However, if for reasons beyond an employee’s control notice cannot be provided, the law still applies, and leave must be provided.

Employer Notice

Employers must conspicuously post on each of its premises a notice of benefits available under this law. The notice must be posted in English and in each language other than English that is the primary language of five or more employees of self-employed individuals of that work place.

The Massachusetts government website also included some frequently asked employer and employee questions. We know this law is complex, so feel free to reach out to your StratEx HR Consultant for questions!

Overcoming Unconscious Bias in the Workplace

Close your eyes and imagine the following scenario in your head: You’re listening to a news report regarding a high-speed chase on your local freeway. Who do you picture as the culprit of these offenses? Do you immediately assume they are a man or a woman? What is their race or ethnicity? What about the police officer who caught them?

If you pictured a specific gender, race, or socioeconomic background, you just applied unconscious bias. Whether we like to believe it or not, we all suffer from some scale of this cognitive process. In a time where companies are looking to diversify their workplace (and employees are demanding it), a manager or employer’s unconscious bias can become a large liability.

What is an unconscious bias?

Unconscious bias is defined as a prejudice, quick, or unsupported judgement in favor or against one thing, person, or group as compared to another, in a manner that is usually considered unethical. As a result, certain people or groups can unfairly benefit or be penalized. From early childhood, our brains are hardwired to make unconscious decisions, as we are often forced to act and think quickly in a complex world. This means our unconscious thoughts and actions have a direct link.

How can it affect your workplace?

Understanding the definition of unconscious bias can help us better understand how these judgements can negatively impact a workplace, and also make us more self-aware so that we can combat our biases with thoughtful behavior.

Interviewing: If your company mainly uses word of mouth or referrals to find new talent, this can limit the diversity of your candidate field. This is because employees naturally tend to provide recommendations to friends and peers who look and act like them. If your workforce already lacks diversity, this may amplify the problem. Further, if your management has not received proper training on interviewing best practices, their unconscious bias regarding a candidate’s name, credentials, education, and activities may affect their hiring decisions. For example, African-American candidates have reported that they have removed portions of their resumes to remove evidence of their race including their full name to make them appear “whiter”.

Progressive Discipline/Performance Review: Objectivity is the foundation of a credible review process. Psychologists have found that 61% of an employee’s rating is based on the judgement of the rater, rather than the ratee’s performance. When utilizing judgement compared to real data and the results of the employee being reviewed, favoritism and unfair treatment become commonplace. This unconscious bias can lead to employees feeling disengaged and under appreciated.

Promotions: Many times, unconscious bias can be disguised as common sense. Some examples include the notion that older employees are not great with computers, or certain job criteria would be performed at a more efficient rate by a man compared to a woman. However, this way of thinking  could eliminate qualified and talented employees from receiving the chance to perform at a higher level.

There are additional areas that can be impacted using unconscious bias in the workplace, however the above areas will present the highest level of liability to your company, as bias can be perceived as discrimination. When these judgements go unchecked, the culture of your organization will suffer, leading to dissatisfaction with management, toxic work relationships, and an increase in turnover.  

Ways to Combat Unconscious Bias

The first step in changing your culture and understanding your liability to unconscious bias is to diagnose the current state of the workplace. Ensure your policies and procedures foster an inclusive work environment. Also, seek out ways to diversify your workforce at all levels. This isn’t an easy task, and often you will need to create a business case to persuade senior management to set aside budget for this cause. Note: These initiatives can only be successful when there is buy in from senior management.

Recruit from diverse sources: Look for candidates outside your normal recruitment process. Your company can introduce “name blind” and “gender blind” recruiting policies by removing certain fields on candidate applications to prevent initial spot judgement. You should also ensure your application tool looks for objective factors.

Provide active & engaging training: Talking at managers and employees with a PowerPoint presentation is not going to move the needle in understanding our own biases and how they affect the workplace. In fact, companies that only utilized traditional training saw a decrease in diversity, according to the Harvard Business Review. We recommend creating trainings that are interactive and provide real life examples. Allowing a manager to see biases unfold via an interactive training can help them develop a habit of becoming aware of their own biases.

Focus on Job Competencies: Ensure managers are well versed in the job competencies associated with each position they oversee. These job-specific areas such as knowledge, skills, and abilities needed to be successful in a position should be the point of focus when interviewing, hiring, and promoting individuals in your organization.

Mentorship Programs: Look outside ordinary training programs to find ways to connect with employees. The National Human Services Assembly states that implementing mentoring programs promotes diversity by giving every employee a chance to grow professionally. This benefits both manager and employee, as mentoring encourages managers to interact with employees they may have biases against. Creating a mentoring program allows employers to invest in employees’ success.

In order to foster a culture of diversity and remain legally compliant, ensure you deploy all these tools throughout the entire organization from your line level employees to your corporate team. Raising awareness of unconscious bias in a top-down approach provides employees the opportunity to review their own biases and work on ways to eliminate these biases in a more open and honest manner. If you have any questions or want to discuss this topic further, please reach out to your HR Consultant.


American Labor Unions – Laws and How To Protect Your Rights as An Employer

American labor unions have been labeled many things over the years; from the support system for common interests of blue-collar workers to the bane of employer’s existence. Over the last 70 years, the number of labor unions has decreased from 35 percent to 11 percent, with most unions existing in the public sector. However, earlier this year the country saw its first successful “wildcat” strike in over 40 years from the West Virginia Teacher’s Association. While the idea of unions has been polarizing throughout history, it’s not only important to understand how we got to the lowest level of union participation ever, but also review the laws surrounding the creation of unions and the rights you have as an employer.

Brief History of Unions

The labor movement began in 1935 with the signing of the National Labor Relations Act (NLRA) which created the right for employees to unionize. The law also recognized some employers had created unfair labor practices surrounding unionization, which the NLRA declared unlawful.  The National Labor Relations Board (NLRB) was created to enforce the principals of the NLRA. Within the first decade of creation, the board helped reinstate 76,268 workers and reclaim $12,418,000 in wages owed. Today, many employers believe that the NLRB has created policies that make it too easy for employees to organize and put unrealistic constraints on employers (i.e. creating handbook policies that could be perceived as having a chilling effect on the movement). By the end of World War II, more than 12 million American workers belonged to unions. However, the same rights granted under the NLRA were not provided to minorities and women in the workforce.

The formation of the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) continued to strengthen the power and appeal of labor unions. However, throughout the next 70 years unions saw both an influx of union friendly laws and laws that restricted the rights of unions and put more power in the hands of employers. By 2009, only 12 percent of American workers belonged to labor unions. Following the election of Barack Obama in January 2009, American Labor unions saw their first resurgence of pro-union policies since the early 1980s.  

Previous Administration

Under the former Obama administration, multiple executive actions were issued in what the administration called an attempt to “level the playing field for labor unions in their struggles with management”. The most striking changes came to the rules surrounding the election process known as “ambush elections”. These new guidelines shortened the time from when union elections could be held, from 38 days to 10 days. Thus, making it easier for unions to win elections against employers because they no longer have time to explain why not unionizing would be better for employees or address the company’s goals to meet employees’ requests or needs. However, many other smaller legal changes expanded the powers of unions and employees, including; 

  • Eliminating retaliation against employees for discussing wages with coworkers in the workplace
  • Five additional states passed “right to work” laws (AL, KY, MI, WI, WV)
  • Establishment of “micro-unions” within one company. Micro units allow certain groups of employees to unionize within their own group. For example, all servers unionize amongst themselves and at the same restaurant all line cooks unionize within their own group.
  • Changes to the definition of joint employers; creating a greater sense of liabilities for franchisers based on the unlawful practices of their franchisees.

Current State

Like President Obama, candidate and President Donald Trump coined himself as the man of working people and an advocate for the American union worker. Initially he reflected this in his first weeks in office by pulling out of the Trans Pacific Partnership and inviting the heads of top unions to the White House for a roundtable discussion. Following those initial meetings President Trump appointed new leaders (John Ring as chairman, Marvin Kaplan and William Emanuel-members) to the National Labor Relations Board. All new appointees are Republican leaning and have ties to big business. They’ve also made quick work at challenging and reversing many of the Obama era rulings previously discussed.

The most critical blow to unions under the new administration came not from the executive branch but the judicial branch in the Supreme Court decision Janus V. Afscme. In June 2018, in a 5-4 landmark decision the court ruled that it was no longer legal for unions to force the collection of fees from public employees who are not members of the union. The ruling stated, employees must “clearly and affirmatively consent before any money can be taken from them”. What does this decision mean? If you are a non-union employee working for a company that has other groups of employees who are unionized, you are no longer on the hook to pay “agency fees”. Unions believe they are due these fees because these non-union employees receive certain benefits created by the union’s presence in the company and cover collective bargaining costs. Labor activists believe this decision hinders the ability of workers to “join collectively behind the power of a unified voice”.

After understanding where we have come as a country when it comes to the establishment of unions and where things stand today, it’s important to understand your rights as an employer and how you can prevent all employees or units of employees from unionizing;

  1. Avoid Chilling Statements in Handbooks: When reviewing or writing your Company handbook ensure there isn’t any policy language that could be considered to chill employees in the exercise of protected activity; such as speaking of wages with co-workers or speaking out on social media about work conditions. Note: Avoid using overly general statements and instead focus on the interest of the employer by making a clear statement. If you believe any of your policies may have a chilling effect, please reach out to your HR department or your StratEx HR Consultant for review.
  2. Guidelines/Parameters for Solicitation: Companies can prohibit distribution of union election campaign material in all work areas during working hours. Restaurants specifically can prohibit solicitation in selling areas during both working and nonworking hours. However, prohibiting distribution in nonwork areas is illegal. Nonwork areas include locker rooms, rest rooms, parking lots and breaks areas. Note: If you let employees bring in materials for selling goods for a side business or their children’s school this could open the door for other forms of solicitation. Best case scenario is to stick to your policy and allow no solicitation.
  3. Be Proactive with Employees: Don’t catch yourself flatfooted and playing catch up when it comes to potential unionization in the workplace. Using the following best practices can help companies avoid a union coming into their workplace;
    • Engage with employees on a regular basis regarding work conditions, pay structure, and overall general satisfaction. Then be prepared to address the information employees provide. Letting things slip through the cracks will lead employees to go elsewhere to get their needs met.
    • Be transparent when new policies and work rules are put in place, so expectations are known and there is no room for misunderstanding.
    • Get management in the mix! Ensure they are committed to creating a culture that supports diversity of ideas and constructive feedback.
  4. Develop an Action Plan/Task Force: These small things could shift employees’ opinions in voting yes to unionization;
    • Be ready to push out your anti-union campaign and appeal to employee concerns about labor conditions should a successful union petition be submitted to the NLRB. Note: 30% of workers need to sign a petition for the process to begin. Also Note: Anti-union rhetoric should not be used prior to union petitioning occurring.
    • Be well educated on the history and current state of the labor union trying to enter your work place so you can provide details to your employees.
    • Hold meetings with your employees to answer questions and discuss the company’s position and concerns about unionization. Use these meetings to highlight positives of the company, provide more context on why joining a union would not be advantageous to them, provide a game plan for addressing employees’ concerns.
    • Ensure there is a member of management available to observe election procedures of fairness and accuracy.

Navigating a workplace that unionized can be extremely difficult. However, being proactive in gathering feedback from your employees and working with management to create a transparent environment will mitigate a company’s risk of having to deal with a unionized workforce in the future.


Immigration Compliance for Employers in the Trump Era

As presidential administrations come and go, Congress continues to attempt (and so far fail) to pass sweeping immigration reform.

Immigrants, both naturalized and here on work visas, make up more than 17% of the American workforce, with an estimated additional 5% of the workforce working illegally. The Trump administration has taken a hardline approach on policies surrounding immigration, as seen in a 76% increase in ICE (Immigration and Customs Enforcement) raids on businesses since January 2017.

Some of the most heavily impacted industries include restaurant and hospitality groups and manufacturing plants. With the administration’s recent Supreme Court win on the travel ban and no clear path to citizenship for individuals in the DACA program, companies must look inward and actively understand how to protect themselves under these new policies and guidelines.

Form I-9 Overview

Let’s start with the basics. In November 1986, under the Immigration Reform and Control Act, the Federal government created Form I-9 as a way combat unauthorized work in the United States.

What is Form I-9?

Form I-9 was created as a tool for employers to document and verify the identity and employment authorization of individuals hired for employment in the United States. No matter the size of your company, all employers must complete a Form I-9 for each employee hired. For employees rehired within three years of their original termination date, only Section 3, Re-verification, needs to be completed by the employer.

The employee must attest to their work authorization in Section 1 on (or before) the first day they begin employment, and a representative from the employer must review employee-provided documents supporting work authorization and proving identity in Section 2 no later than 3 days following the employee’s date of hire.

While seemingly straightforward, Form I-9 is huge source of not only financial risk, but also legal liability. ICE audits can lead to large fines, costly lawsuits, and potential mass loss of employees.

Best Practices to Protect Your Business from ICE Audits

Educate HR Personnel

  • Ensure all staff members who are responsible for completing Form I-9 for newly hired and rehired employees are aware of time sensitive deadlines for completing the form
  • Create procedures surrounding recertification of documents for those employees on work visas that may expire
  • Utilize resources, such as I-9 Central, to review proper documentation for List A, B, and C items

Formalize Policies

  • Create clear policies outlining the company’s desire to hire only eligible employees for work in the U.S.
  • Consider implementing the use of E-Verify, an online based system used to proactively review an individual’s ability to work in the U.S.

Conduct Self-Audits

If your company has not completed a self-audit, now is the time do so. Follow these steps when reviewing your documents:

  1. Review all documents and separate all terminated employees’ Form I-9 (Note: These must be retained for a period of 3 years from date of hire or 1 year from date of termination, whichever is longer)
  2. Review Section 1 for common errors such as date of birth, signature, date of signature and attestation of authorization to work
  3. Review Section 2 for common errors such as under/over documentation, using unapproved documentation, failure to complete the section
  4. Correct any errors with a single strike-through (Note: White-outs and erasures are not acceptable corrections) (ALSO Note: Only Employees can complete edits to Section 1 and only Employers complete edits to Section 2)

This process may vary slightly with the electronic Form I-9, but the basic principles of what to look for remain the same.

Employer’s Rights

Many employers are unaware of their rights in cases when an ICE agent shows up at their place of business. Companies should consult an immigration attorney when dealing with employees on visas or individuals losing status due to the expiration of programs such as DACA. For more guidelines surrounding employer rights, check out this helpful overview from the American Immigration Lawyers Association.

Be Proactive

As the country ponders over the correct legislative fix for immigration, businesses should proactively review their practices and policies to determine their level of liability in complying with State and Federal laws around hiring and work authorization. While it will not always absolve you of any problems, the proactive approach will win you some favor when it comes to formal audits and potential lawsuits.

StratEx HR clients can reach out directly to their HR Account Manager with any questions on this topic.

StratEx Serves Joins Serve-a-thon

On June 23rd, a group of StratExians volunteered through Chicago Cares for their 25th anniversary Serve-a-thon.

Each year, the Chicago Cares Serve-a-thon draws 6,000+ volunteers from throughout the Chicagoland area, and for the second consecutive year, a group of StratExians joined the effort. This time, the work involved volunteering at Little Village Lawndale High School, a local Chicago public school.

Little Village Lawndale High School is a particularly special school, as it was founded 13 years ago after a group of parents and grandparents went on a 19-day hunger strike demanding quality education for their children within their community.

Throughout the day, the StratEx Serves team painted over three classrooms in the Multicultural wing of the school, and then pitched in at the end of the day to help paint outdoor benches. These updates not only helped create a fresh learning environment for the kids who attend class in the school, but it will also ensure the limited funds available to the school can be used to purchase updated textbooks, new computers, and other creative learning tools.

We are proud to offer our time and energy towards helping our community in tangible, meaningful ways through this great organization.

Keeping Workplace Violence Away

Over the last month, the debate around gun control has been front and center, amplified by social media and media coverage. While your employees’ values and interests may range across the spectrum, questions around security, crisis management, and workplace resources might be top of mind for your workforce in the current climate.

To be proactive and address employee concerns, companies should consider implementing best practices along with providing tools, resources, and training to mitigate workplace violence and reduce costly liabilities.

Understanding Disruptive Behavior

Most employees, guests, or vendors do not turn violent overnight. However, one in six violent crimes happen at work. (source) Employers miss the signs because our idea of violence is too limited. In some situations, the aggressor is not directly connected to the Company (i.e. domestic partners).

One of the best defenses a company can use in combating workplace violence is early detection of disruptive behavior or changes. Some of the telltale signs include:

  1. A pattern of tardiness, absenteeism
  2. Disconnection from job functions or lack of focus
  3. Changes in attitude (i.e. isolated or aggressive towards co-workers)
  4. A decline in self-care (i.e. hygiene, appearance)
  5. An expressed interest in weapons

Note: Determining if an employee is a threat should be separate from progressive discipline.

ReminderThe greatest predictor of future behavior is past behavior. Has the employee acted out in an aggressive manner in the past?

Planning Ahead


Managers should be coached on how to manage workplace bullying, harassment, and tracking changes in behavior. Ensure all employees are aware of ways in which they can escalate concerns, admissions of depression or traumas, domestic violence, and/or threats. Having a broad workplace violence policy can provide clear guidelines.

Reminder: Some states and localities allow individuals to carry a concealed weapon. However, employers are entitled to prohibit employees from bringing weapons into work. Companies can communicate these policies via signage outside their workplace. Employers should review their building’s policy guidelines to ensure it aligns with their concealed carry policy.

Open Communication

Create an environment where employees and managers can report concerning behavior or interactions, which will allow HR or on-site management to intervene and ask questions such as “How are you doing?”. With early detection, HR can provide guidance on company resources available and determine the crux of behavior change.


If you don’t have an Employee Assistance Program (EAP), reach out to your health care broker about adding this benefit. EAPs offer employees the ability to meet with counselors anonymously about issues going on inside and outside work. Some programs provide on site assessment of threat levels. Providing access to an HR hotline or posting Suicide Prevention information in high traffic areas can encourage employees to reach out for help.

Act Quickly

Once a situation is identified, immediately evaluate to determine validity, assess the information gathered and move forward with managing the situation. Every situation will be unique, so the method for moving forward should be analyzed throughout the process.

Partner with Local Law Enforcement

Police and fire officials are trained in de-escalation as well as implementing escape plans. Some departments will come to your location and train staff on these plans. Don’t rely on your HR expertise to complete this difficult task; lean on the experts.

While it is unclear how the federal and state governments will affect change on this topic, companies can mitigate damages by implementing policies and procedures designed to respond to and manage disruptive behavior. Providing employees with necessary resources, along with open channels of communication and clear guidelines around workplace violence, will help solidify the company’s commitment to the prevention of workplace violence.

Ask StratEx HR: What to Do When An Employee Lies About Being “Out Sick”

Dear StratEx HR,

brunchIt has recently come to my attention that one of our servers called in sick for her shift on Saturday. As you know, Saturdays are one of our restaurant’s busiest days. This employee claimed that she was sick; however, another server saw her out partying at brunch via her Snapchat story. The other server also stated that the Snapchat story showed the employee partaking in the use of illegal drugs. With the new sick leave laws, I cannot ask an employee for a doctor’s note and clearly she was not sick.

Can we dock this employee’s pay for the day as an unexcused absence? Can we discipline her for lying and going out to party instead of working her shift? Can I terminate her for the use of illegal drugs based on our policy? I don’t want to set the precedent for our other employees that sick time is a free for all.

Brunch So Hard

Dear Brunch So Hard,

Social media has severely changed the amount, and type, of information that we can uncover about our employees. The first thing that you should always consider in situations such as this one, is whether or not the employee was representing the company while these actions took place.

If the employee is caught drinking or doing illegal activities while on company time, either at your restaurant or out in the community, then it is within your legal right to hold that employee to all applicable policies. On the other hand, if the employee is on their own time, the company cannot manage, coach, or discipline those actions– even if we don’t agree with the behavior from the company’s moral perspective. (Please note that some policies clearly state guidelines that extend outside of the workplace, e.g. harassment. Employers can still hold employees accountable for those infractions even if they occur outside of work.) 

In addition, we never want to discipline an employee based on speculation or rumors. If you have not seen the evidence first-hand, and do not have all the facts surrounding the incident, then your best move forward is to not act in a negative way. Instead, monitor the employee’s performance in the workplace to understand whether or not her performance is being impacted or determine if a concerning pattern is developing.

If you do witness her actions first-hand via a social media platform, the best thing you can do is let the employee know that you are aware of her “unexcused absence” and reiterate the company’s policies on attendance, professionalism, zero tolerance for drugs and alcohol in the workplace, and acceptable reasons for using paid sick leave. After you’ve had this conversation with her, make sure you document everything that was communicated. As a company, you will want to determine if there is a pattern of absences developing and prove that a conversation was had with the employee about the definition of a reasonable absence, per the law.

Let the laws and company policies guide you to a strong and effective management decision. In situations like this, where you know the employee is taking advantage of a policy, determine what other policies might have been violated in the process. For example, did the employee adhere to the call in/out procedure properly?

Overall, we must remember that our employees are allowed to lead lives outside the workplace; however, if we determine they are lying, then we should use all tools available to correct the behavior and reiterate the expectations of the company. Finally, remember that being friends or following your employees on social media is always tricky and can lead to further complications in the company/employee relationship.

StratEx HR

Your No-PTO Policy: The Good, The Bad, The Ugly

In a recent campaign aired by MasterCard, children of working parents are trying to understand the rationale of giving up PAID vacation days. These idealistic children imagined all the fabulous things that could come from taking back that one day. We all remember being kids and the excitement we had in anticipation of a day off. Why hasn’t that same excitement transpired into our adult life? Last year 40% of Americans left vacation time on the table, expired and essentially taken away.

So, what if there was no structured time away from work policy at all? Many employers are now opting for a No-PTO policy that essentially provides unlimited PTO taken by employees as needed. Would more employees take time off? Would your workforce abuse this? Would productivity soar or fall flat? These questions are forcing employers to ask if unlimited time off is the right move for them.

The Good:

A strong work-life balance plays a major role in the recruitment and retention of employees.  Allowing employees the ability to manage their own time and essentially create their perfect work-life balance ensures that everyone wins.

In states that mandate employers to pay out all unused accrued vacation /PTO time at termination, time away from work policies can be costly; the absence of a PTO or vacation policy can possibly remove this liability if executed properly in a compliant manner.

From a recruiting standpoint, if your goal is to hire motivated, responsible employees who seek to balance their time off with completing their projects – you now have the ultimate recruiting tool. Further, some employers may be betting that motivated employees will intrinsically take slightly less PTO under an employee-directed “no-PTO” policy, and use only what they truly feel they need.  This should not be the main goal of this PTO structure, but it could be a nice perk if it results in increased productivity and cost-savings!

The Bad

No one likes a perceived value. It’s in our human nature to associate tangible things with value. If there is no policy on how time off is taken, many employees will find it challenging to see this as a benefit of their employment.

Using the term unlimited instead of simply having “no policy” for time off can also be dangerous for those employers in states that require payment of unused accrued time at termination.  What is the value of unlimited when it comes to accrued time? There are strict state-specific guidelines for executing this no-PTO-policy in order to eliminate the payout liability at termination.  If employers do not adhere to these guidelines, they could be on the hook to pay out unlimited PTO.  Yikes!

Currently only 1% of companies are adopting these standards. That’s because it’s simply too difficult to administer in most industries and work environments.

The Ugly

Unless you have a company full of salaried exempt employees, having a no PTO policy in place is confusing to execute as hourly employees simply aren’t paid when they don’t work.

We all hope that we can trust employees to not abuse a policy, but let’s be real, that isn’t always the case. If work isn’t being completed then odds are your bottom line is being affected – the C-suite’s worst nightmare.

Even under current standards of employers giving a prescribed amount of time off to employees, they aren’t taking time. With no structure in place it is likely some employees will take less time instead of more. This could do more harm than good, including but not limited to: employee burnout, extremely unbalanced work-life ratio, stress, poor work product and many other key factors that hinder an employee’s performance.

The Key to Compliance

Kind of sounds like a double-edge sword, right? If you are an employer considering going rogue with your vacation/PTO policy, the best bet is to ensure consistency, set guidelines, and be completely transparent with how it would work.  The rest is up to the employee.