Can someone explain the reasoning behind the policy of not allowing an employee to take paid time off after she submits her resignation? I’ve poked around online, and it seems it’s so that employees don’t save up their PTO, tell the boss they’re giving 2 weeks notice, and then announce they’ll be on vacation for two weeks instead of in the office. I’m sure some folks would do that (though I think many wouldn’t), but doesn’t the policy lead to people giving shorter notices than they would if they thought they could still take their PTO as needed?
I’ve worked for a small non-profit for many years. I’m deeply invested in the mission and like to think I’ve made a real difference here. As with many lower-paying jobs that require a lot from the employee, it would take some time to find and train a replacement, and the mission will definitely be disrupted while that’s going on. It seems as if it would benefit the employer to have a longer notice period, even if the employee does use the PTO they’ve (after all) earned during that time.
Just musing about this, though even just musing about retirement is fun.
Years ago, I worked for a place that required you work your last day, but could take earned time off before then. They would not pay out your time if you did not return after your vacation.
I don’t know but I think the answer would depend on your state laws, nature on your employment relationship, (eg at will, contractual, etc). In CA, most employees tend to be “at will”, meaning either employer/employee can terminate the employment relationship at any time for cause or for no cause at all. Two weeks notice isn’t required by anyone. As an employer if I let someone go I would have been required to pay them in full at termination, including all accrued benefits. If they gave me at least 72 hours notice I would have been required to pay them in full at termination, including all accrued benefits. If the employee just quit I would have been required to pay them in full within 72 hours of the employee quitting, including all accrued benefits. As to the amount of owed employee including accrued benefits, it tends to be wiser to err in favor of employee. As an example if an employee was hired on January 1 and was entitled to one week vacation pay after one year, and I fired them or they quit on June 30, they would be entitled to 6 months of vacation pay at termination, but that’s CA law. Does your non profit have an employee handbook that addresses this issue.
I believe the theory is so that someone can’t plan a vacation and then give notice just before departing on vacation, thus leaving the employer in a bit of a bind. This is especially common in small companies where one person may be the only person who does their duties.
My company will pay out all accrued pto time but only if the departing employee gives two weeks notice AND works those two weeks.
If someone has a hussy fit and quits, no payout of accrued.
It depends on the company. It depends on the circumstances. I recently left a job with a government contractor because the company had lost the contract I worked on. Although official HR policy says you have to give two weeks notice, the company happily accepted one week’s notice from me because I would have been billing entirely to overhead in the second week. (I did have some work to finish up during the first week.)
If the company had insisted on two weeks notice so that I could get paid for my accrued vacation time (NINE weeks worth), I would have been quite willing to do so. But they didn’t insist.
Years ago, I worked for a company that accrued your entire year’s vacation in January. An employee scheduled two weeks off at the beginning of January, used the time to check out a new job and then came back and quit without notice. He had been there a long time so he had about a month or so left. Now, you accrue 1 - 3 days a month depending on your seniority. If you are out at the beginning of a month, you lost that month’s time but nobody accrues after October. So, I scheduled an 8 week disability leave for the second week in October.
Thanks for sharing your perspective, all. Our non-profit has a grand total of three employees. For many years there was a relaxed, flex-time approach to personal leave, which resulted in great employee morale, long tenures, and a non-profit that zipped along quite successfully. Our current board president apparently found that horrifying and has made it his job to bring everything into line with how a “real business” runs (except for the salary/benefit part).
He tells us he has a friend in HR advising him, but we think the friend is Mr. Google.
Our California nonprofit has no such rule. But then, approval of PTO is not automatic. The request can be denied (excepting federal/state requirements such as maternity.) The PTO bank is accrued so cash must be paid out on the ee’s last day.
Violates California labor law, as all accrued benies must be paid out. (You don’t say if your company is in California, however.)
This varies by company as well as state law. Every company I have worked for has paid for earned but unused vacation time but has not allowed employees to take time off after a last day and effectively be a non-working employee. I think that the reason is that if you are off, you are technically still employed. At some companies, this would then require them to continue to pay for health benefits, count the time toward option vesting (not an issue at a non-profit),etc. and continuing to accrue more vacation days. I suspect that it would not have mattered for most employees, but I can imagine that there were a few where this might have been an issue.
In your case, at such a small organization, I would think it would behoove them to manage your transition out as graciously as possible as your help in onboarding a replacement could be invaluable.
I have worked at employers with different policies on this. None of them allowed an employee to take PTO during their 2-week notice period. One did not allow any pay-out of PTO after the employee resigned. Another allowed pay-out of all PTO accrued to date. Current employer allows 75% payout, but only for the amount accrued to date in that year, and not including any carried over from the prior year (this is the only employer I have had that allows a carryover of up to 20 days - and I had to scramble to get my carryover down to 20 days so I didn’t lose any this year!). Employers can do what they want, as long as it doesn’t violate federal, state or union (if applicable) rules.
If you have accrued a lot of PTO and you resign but want to take all that vacation, the company will still be paying your health care premiums, you will actually be accruing more PTO while on PTO, etc etc.
I worked for a company where you earned vacation during the year, but it did not vest until Jan 1. Sooo, the year I resigned on Jan 2 so did 7 other women in my department. We wanted our vacation time, plus our two ‘floating holidays’.
My opinion. You work for a non-profit…and the wages probably are not in alignment with the private sector…at all. One of the things that makes your place of employment appealing is the PTO policy. Other working conditions come into play as well. Simply put…folks aren’t working there for the big buck salaries.
When the three of you resign, which will happen eventually, does your new board president want an attractive package to offer to new applicants…or is he just plain cheap. If cheap…he may find that his applicant pool is a small one…with less experience…and attrition will be more frequent.
@thumper1 - I know you don’t, but it’s as if you know this guy!
@kelsmom, these two scenarios illustrate what I don’t get. Don’t they encourage employees to give as short a notice a possible? In some working situations, this is no big deal. But it took several months to find a replacement for our director. If she’d given 2 weeks notice instead, the agency would have been at a real disadvantage for several months.
DH’s company follows the rules that vary across the multiple states in which they operate. So, when two of his employees left, with a similar amount of accrued PTO, one who lived in one state got a full payout, while another who lived in another state (most employees only would get) only got 50% of the unused PTO.
So, most folks plan their vacation, use up their days, and then give their customary, but not required, 2 weeks notice. In his field people can effectively get a bad reputation for leaving with less than 2 weeks notice.
Of course, there are some who have given notice and that they intend to work for a competitor, sometimes the company waives their attendance requirement for their final 2 weeks, and pays them anyway.
Since PTO, as a concept, includes vacation, personal and/or religious holidays, as well as sick time, the idea behind was in part that since many would not use all their sick time, why should the company pay for them once an employee leaves. As a concept, PTO is designed to treat all employees fairly - and it makes sense compared to the way it was before in most companies, with X days vacation (perhaps based on years of service, or exec level), Y holidays, and Z sick days. Employees have different needs and reasons to be away from work.
Yes, PTO as a concept lumps all time off into one basket to use as wanted/needed. Depending on short and long term disability options, this could prove risky if one depletes vacation and then becomes ill or injured.
In reality, separate banks allow sick folks to use vacation time, but vacationing folks cannot use accrued sick time.
As I near retirement consideration, I am using sick time to schedule health care appointments, as I won’t be paid out for any accrued sick time.
ETA -@3puppies, PTO concept does not preclude employer from granting more time off to more senior employees. It only affects how the time may be used.
I have a small office of 9 employees, 4 are FT. I offer PTO to FT employees only based on years of employment, plus 6 paid holidays. PTO accrues on an annual basis that starts after your 90 probation ends. After one year, a FT employee is entitled to one week PTO and is based on the number of hours she works per week. 32 hrs/week equals 32 hours PTO. You can quit the day after your anniversary hire date and I pay it all out. If you don’t use it all, I pay the remainder out at your anniversary date.
I stopped the sick pay as everyone used it up first, sick or often not sick.
@frazzled1 , the handbook actually stipulates the 2-week notice time period. No PTO the final 2 weeks. My predecessor worked with me for a month before she retired, and they did allow her to take PTO between the time I came on & the 2 weeks prior to her date of departure.
And the basket is usually smaller than the combined baskets for traditional vacation and sick time.
The company that I used to work for gave every incoming employee 5 days of sick time on the day they started. This was partially to help out people who had moved to a new area to take the job and had to find and make appointments with new doctors and dentists for themselves and their children (all of which could be counted toward sick time), but it was mostly because long-term employees had complained incessantly about new people coming to the office with dripping colds and infecting entire floors worth of their colleagues because they had no other option.
I doubt I will ever see such a sensible policy again.
Incidentally, I had forgotten, but I took two hours of sick leave from that company after I had given my notice to keep a long-scheduled medical appointment. No one objected. I don’t know whether I would have gotten the same consideration if I had been charging those two hours to vacation time (say, to take my car to get fixed).
My husband’s company offers unlimited vacation time. I thought more companies were going in that direction rather than trying to take time away from employees.