Can You Have Different PTO Policies for Different Employees?
Managing PTO is easy when you’re running a very small team, and everyone in the team has similar roles and their entitlements are more or less the same.
At this stage, not that much thought needs to go into your PTO system – you could even get away with managing everything in a simple spreadsheet.
But PTO can get complex when your team grows, you add different employees working in different roles, some full-time, some part-time, some getting paid a lot, others not much.
One complex issue that can arise is the question of having different PTO policies for different employees.
A lot of people aren’t sure whether this should be done, or even if it’s legal to do this. And not knowing how to handle this can get you in a lot of hot water.
Keep reading and we’ll explain everything you need to know about having different PTO policies for different employees.
Is It Legal to Have Different PTO Policies for Different Employees?
Yes – in most cases, it is legal to have different PTO policies for different employees.
Though PTO laws differ from location to location, there are little to no places where companies must offer the exact same PTO benefits to everyone in the company.
The one caveat is that your PTO policies cannot be discriminatory, meaning you can’t offer more or less PTO based on protected characteristics, such as race, gender or sexual orientation.
Example Situations
So what are some common situations where you might provide different employees with different PTO policies?
Let’s take a look at a few examples now.
Part-Time vs Full-Time
It’s understandable that part-time employees won’t get as much time off as full-time employees.
If full-time workers get 20 days of PTO per year, for example, a part-time employee who only works 2-3 days per week may receive half the PTO benefits.
Hourly vs Salary Workers
PTO policies are often different for hourly workers and workers who receive a regular salary. One group might receive PTO in days, the other in hours, and one might accrue at the same rate each period while the other earns PTO as a percentage of their working hours.
Probationary Periods
It’s a common thing for employees to only gain access to PTO after a probationary period. For example, they may need to work for six months, or a year, before being allowed to take paid time off, which would mean a new employee has a different PTO policy than someone who has been at the company for longer.
Teams in Different Locations
Remote teams with workers distributed across the globe may sometimes (not always) give workers in different locations different PTO policies, in order to comply with leave laws in each country that often vary greatly.
Seniority
Like with compensation, you often earn more PTO the longer you work for a company.
The average US worker gets 11 days of PTO per year after one year of service time, compared to 20 days of PTO after 20 years of service time.
Job Role
Similarly, some roles may receive a higher PTO entitlement than others, such as an entry-level worker vs a senior manager.
Incentives & Rewards
Sometimes employees receive extra PTO as a reward, like they might do with a monetary bonus. Alternatively, PTO may be given as an incentive, to encourage a new hire to join the company, or to prevent someone from leaving for another job.
Key Considerations When Creating Your PTO Policies
Just because you can offer different benefits for different employees doesn’t necessarily mean you should.
Though you may not be breaking the law, you could cause serious harm to morale if your benefits policy is perceived as unfair.
Just take a look at this Q&A question from a San Francisco-based employee, posted on Avvo.com:
“I just found out that another team in the SF office has five weeks of vacation, not the three that my team (and everyone else) has. They’ve had it all year, and apparently there is some sort of ‘don’t ask don’t tell’ policy going on- because they all knew that they had the most vacation in the company, and nobody spoke up.
I’m mad and so is my team. We feel like we’re less valuable than the other team, and we’re angry by the lack of transparency.”
You can make some people extremely upset if they find out that similar employees working a similar job get a lot more than they do.
With that in mind, here are some things to consider before you decide to give different PTO or vacation policies to different employees.
Ensure Your Policy Doesn’t Discriminate
The first, most important part, is that you don’t offer different amounts of PTO based on discriminatory factors.
There are certain characteristics that cannot be the basis for different PTO, compensation, etc. They may be slightly different from country to country.
In the UK, they are known as protected characteristics, and these characteristics include:
- Age.
- Gender reassignment.
- Being married or in a civil partnership.
- Being pregnant or on maternity leave.
- Disability.
- Race (including color, nationality, ethnic or national origin).
- Religion or belief.
- Sex.
- Sexual orientation.
The US Equal Employment Opportunity Commission (EEOC) protects workers based on similar characteristics.
Not only will discrimination based on any of these factors get your company in legal trouble, it’s a one-way street to creating a toxic work environment.
Each Policy Should Comply With Any Relevant Laws
Along with not breaking laws related to discrimination and protected characteristics, your PTO policies must comply with any other labor laws.
For example, in the US, it would be legal to provide 10 days of PTO per year. But if you have employees in Austria, bound by Austrian law, the law requires them to get a minimum of 25 days of PTO per year.
Offering 10 days off to everyone may mean you violate Austrian labor laws.
If you have employees in different locations, this may mean you have to provide different policies for each location, or just boosting your overall policy to meet the country with the highest minimum PTO allowance.
For complete legal advice, make sure you get in touch with a legal professional before moving forward.
Different, But Fair
Once you ensure everything is legally above board, ensure your PTO policies are fair.
They can be different for each employee, but they should be fair.
Think about the example we showed above. It can create a bad environment and strong feelings of resentment if similar workers have radically different PTO policies.
Types of PTO
Using PTO as an incentive or seniority benefits is typically best for vacation time only (and perhaps less common leave types like sabbatical leave).
Try to avoid offering different allowances for things like sick leave, parental leave or bereavement leave.
This implies that someone in management deserves more time off to bond with their new child, or that the death of a close family member has a bigger impact, compared to someone lower down in the organization, and this implication can create division and ill feelings in the company.
An exception may be if there’s a probationary period (there’s often a minimum period of time someone needs to work for the company before being able to take parental leave, for example).
Be Transparent
As a general rule, if you feel you need to hide something, it’s probably not a good idea.
You don’t need to disclose everything about each employee’s benefits and compensation, but if you find you’re worried about other employees finding out that a certain employee gets a lot more PTO, you should reconsider your approach.
How comfortable you are with being transparent about offering more PTO to employees based on role, location, seniority, etc is a good barometer for how fair your policy is, and how other employees are likely to feel about it.
Using PTO as an Incentive
PTO can be a great tool to incentivize employees to produce great work.
Instead of arbitrarily offering more PTO to some employees than others, use it as a tool, as something to strive for.
Incentive-based PTO is generally more effective, and much less likely to seem unfair to other employees.
How to Set Up and Track Multiple PTO Policies
Managing a large team where each employee has their own, custom PTO policy can be a massive headache, especially as your business becomes more successful and your team grows.
You need an efficient system to keep track of everything. We recommend Flamingo – this leave tracking app lets you create custom PTO policies for each team (e.g. marketing, sales, different locations) as well as each employee.
You don’t want to try and manually keep track of PTO balances, PTO given as a bonus, PTO carried over from the previous year and other little details. The job will spiral out of control, becoming a full-time job in and of itself, and you’ll inevitably make errors that cause a lot of disruption.
Luckily it’s a lot easier with a leave management system like Flamingo.
That will take care of the administrative side of things. The rest is about making sure your PTO policy is fair, transparent, and adds value to your business and working environment.
If that means it makes sense to give custom leave policies to each employee, then go for it. Just make sure you follow the advice we laid out above.