7 Paid Leave Policy Tips for a Smoother Vacation Season


Day after day, month after month, employees are all looking forward to that time when they can take a leave with pay and enjoy some time alone with themselves or their loved ones. Having a paid time off policy (PTO) that every employee will love is a challenge to each business organization. You will need to weigh the productivity risks and the staffing strains you might suffer. 

Although not all employers may be required to provide paid time off to their employees, giving your workforce time to breathe, unwind and rest is a privilege every employee will appreciate. So here are a few tips you need to know when planning for a paid leave policy that will boost your employees’ morale and productivity. 


1. Explain the circumstances when the paid leave is applicable

Using any paid time off as a right or privilege is bound with terms and conditions that may be required by law or depend on company policies. Before allowing an employee to earn paid leaves, you might need to determine answers to the following:

What kinds of leaves are allowable?

Will medical emergencies be considered paid time off? Will religious holidays be compensated, too? Categorize the available paid leave credits and let employees understand when each can be available. 

  • Sick leave - Unplanned leave of absence due to illness or medical condition. Sick leave may also be used to take care of family members who require medical care. You may or may allow employees to use this benefit if their spouses, children or parents are undergoing a medical emergency.
  • Vacation leave is the most common type of leave provided to employees to take time off from work. Some employees use this for travel, relaxation and personal matters. Planning is necessary before availing vacation leave benefits so the management can also plan and prevent staffing strain. 
  • Paid time off - A collection of paid leave credits that can be used by any employee for whatever purpose. This can be planned or unplanned but is subject to the manager’s approval. 

How and when is paid time off available?

How do employees become eligible for paid time offs and when are these available for use? You might want to explain in detail if there are any conditions entailed with the leave credits. For instance, employees who have spent more than a year in the company are eligible to have the maximum number of leave credits. The number of paid vacation leave credits usually depends on a person’s length of employment. Some new employees may only be eligible for a minimum number of paid time offs. 

What documents should be presented in case of paid medical leave?

Will HR require the employee to submit medical certificates upon availing of the paid leave? Are there restrictions in terms of checkups, confinement and other health situations? 

What approvals should be sought by an employee planning to go on a paid leave?

Most organizations may no longer require the approval of the employee’s immediate supervisor in cases of medical emergencies. However, paid vacation leaves may need to be applied for weeks before the intended vacation for proper processing and approval. 

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2. Implement policies within legal standards

Medical emergencies and paid leave credits are bounded by laws. Your HR department should be knowledgeable of labor restrictions in terms of the number of available leave credits for each employee, paid time off processing, and leave credits rollover if applicable. 

3. Let employees apply for paid time offs early on

Remind your employees to plan their vacation ahead and apply for days off early on. Ideally, some businesses ask their employees to apply for a vacation leave two weeks earlier than their planned time out. Medical emergencies may not need early application although they may require proof of medical condition.

4. Determine payout for unused paid time offs

Earned but unused paid time offs are usually paid to employees leaving the company. Some states or countries require recompensation or conversion of PTOs to cash. Some places may leave this policy depending on the discretion of the business management. 

5. Set a cap for leave accruals

Employees may have the option to accrue paid leave credits and apply for bulk vacation time off. However, this could affect the company's productivity as not having the best talents for several days may create an impact on the team’s efficiency. Setting a cap on leave accruals will help the management plan and anticipate workforce strain. 

6. Decide on a time frame when paid leave credits can be used

When can employees take their leave? Some organizations implement a use-it-or-leave-it policy, which means if vacation leave credits are not used within the year, the employee loses them. A few employers allow for credit rollover while others also provide cash conversion for unused leave credits for the year. 

7. Communicate the policies to every employee

Communicating paid leave policies to your employees will prevent confusion and misunderstanding. Email reminders on how these PTOs can be used as much as possible. Also, remind them of the deadline for filing for any vacation leave along with the necessary documents to be submitted to support used sick leaves. Regular emails from the HR department can be very helpful for employees to plan their time away from work and enjoy a work and life balance. 



Your paid leave policy may have been smoothly implemented last vacation season but this time, it seems that more employees are taking their time off simultaneously. This may result in understaffing and workplace inefficiency. Businesses should consider seeking the help of staffing agencies like Zebra to tap contract workers or temporary works to fill in the absence of regular employees. Staffing agencies are a great source of skilled employees who may contribute to business productivity and may reduce the impacts of understaffing on your business.


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