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Businesses eye banking paid time off for staffers

When George Lucas’ much-anticipated sixth installment of the “Star Wars” franchise opened May 19 in theaters across the country, employers saw a dark side.

The release of “Star Wars Episode III: Revenge of the Sith” prompted many people to skip work to watch the first viewings of the grand finale in the 28-year series. Based on new surveys and the 2002 release of “Star Wars Episode II: Attack of the Clones,” which drew about 9.4 million people, researchers at the Chicago-based consulting firm Challenger, Gray & Christmas estimated more than half of attendees were full-time workers, including many in the high-tech sector, and calculated the loss from workplace absenteeism conservatively around $627 million.

The episode brought to the forefront the nationwide trend of unplanned absences, which were higher last year than in the past five years, driving up production costs. Industry experts say the increased time off is partly as a result of downsizing, which left remaining employees with burdensome workloads seeking reasons to miss work.

Corporate America has responded by implementing the increasingly popular paid time off (PTO) banks, which make no distinction among the reasons — vacation, sick or personal — that employees don’t show up for work. In 1999, 27% of U.S. corporations had paid leave programs. By the end of 2004, that number had increased to 63%, according to CCH Inc., a Chicago-based human resources firm.

“We’re moving more people toward PTOs,” said Ken Barlow, president of The DelKen Group, a human resources firm in Ridgeland. “The bottom line is that employees often misrepresent why they have to be off work. If the policy allows them to only be off when sick, they’ll call in sick, even if it’s their child that’s sick. You understand to a certain extent because family is so important. By going to a PTO, they have options.”

Using it wisely

The healthcare industry adopted PTOs in the 1990s because finding last-minute staff replacements was costly. The model infiltrated various sectors, from technology to insurance, to adapt to the changing needs of dual-earning couples in the workplace.

A PTO generally has a bank of 10 to 20 days per employee, depending on company policy. Holidays, pre-determined by the company, are not included in the PTO.

“In selling the PTO program, you have to make sure that employees understand if they use all those days for vacation, and then get sick, they won’t get paid for sick time,” said Barlow. “They must use it wisely. Generally, if they’re responsible about using vacation days, they’ll also be responsible about using sick days.”

A limited PTO of 15 days per year might stipulate three days reserved for illness. Otherwise, it can be used for any absence, no reason necessary. Most companies allow employees to roll over a maximum number of PTO days, typically five days, to the next year.

“The employees love it because they don’t have to make excuses for being absent,” said Barlow. “It’s really more private, especially if they’re sick and don’t want to discuss their illness. They can just say they’re taking a PTO day.”

Billy Sims, vice president of human resources for Southern Farm Bureau Life Insurance Company, said the Jackson-based company separates its PTO into two banks instead of one central pool.

“We’ve struggled a bit going to it because we’re a little paternalistic,” he said. “We still have it separated so sick days come out of a separate pool from vacation time. When you separate it like that, you almost have an extra reward system for people who miss a lot of work, so we’re looking at a full-fledged PTO.”

Better time management

Critics argue that PTOs add new stress by limiting total days off and forcing tough choices, but Sims said the logic behind the program is to help employees better manage their time.

“If it’s all in one central pool, you’re more likely to protect it,” he said. “It rewards those people who don’t miss much work.”

When companies convert to PTOs, they may take two weeks of vacation and two weeks of sick time and form a pool of three weeks, saving the company money and essentially giving employees an extra paid week of vacation.

Sims, who pointed out that federal law does not require companies to provide sick time, said that probably half of the companies with PTOs also have separate short-term disability policies, and days missed related to the disability won’t affect PTO days.

“All considered, the PTO bank offers a really good program,” said Sims. “We’ve researched other companies, and almost everyone that’s got it wouldn’t go back.”

Contact MBJ contributing writer Lynne W. Jeter at lwjeter@yahoo.com.

About Lynne W. Jeter

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