Unscheduled absenteeism rates have risen to unprecedented levels since 1999. Excess employee tardiness, unscheduled absenteeism, and paid time off (PTO) create a costly problem for employers. Overall, unscheduled absenteeism roughly costs employers $2,650 per year for salaried employees and $3,600 per year for each hourly worker. Further, these costs do not include the indirect costs associated with unscheduled absenteeism such as lost sales, overtime pay for other employees, hiring temps, missed deadlines, lower productivity and sinking morale.
Employers should understand that absences and tardiness come in many forms. For example, employee absences may be due to physical or mental illness, substance abuse, family emergencies, childcare or eldercare problems, medical leaves that occur suddenly, government or civic-duty related leaves (i.e., jury duty), they are disengaged from their work due to stress, or burnt-out. Additionally, employees may just be irresponsible and prefer taking time off.
In some cases, missing work or tardiness cannot be prevented and is understandable. However, the costs arising from unscheduled absences can be better managed with a clear policy on how to schedule and report an absence to supervisors. Unfortunately, many employees either do not understand the PTO policies in place or simply ignore them all together. When absenteeism becomes intentional or habitual, employers are faced with a real problem that must be stopped in its tracks.
Fortunately, we have provided below a variety of ways employers can reduce excessive absenteeism and PTO abuse.
Employers should first draft a clearly written PTO policy that all employees have access to. Not only should employers provide employees with a copy of the policy (by including the policy in the employee handbook), but it is a good idea to place the policy in a central employee area where it can be read often and serve as a reminder that your company does not tolerate PTO abuse. Employers can encourage employees to schedule their time off by providing time off request forms in the same area where the policy is posted.
Here are some things employers should think about when drafting your PTO policy:
Ensure your PTO policy is consistent with all other policies in place and all payroll department procedures.
A PTO policy should also include a procedure for letting employees know where they stand with their leave banks.
Since PTO is typically considered a part of compensation, think through all compensation issues. If an employee does not use all of his PTO, are the unused days to be paid out?
Apply your PTO policy consistently. Often, supervisors don’t ask for a doctor’s note from some favored employees when they were absent, but will ask for a note from other unfavored employees.
Decide whether sick time will be included as PTO or if sick time should just be sick time. Typically, sick time is not paid out if it is not used, whereas PTO time generally is paid out if not used.
Require employees to personally call in, if possible, on each day they are absent from work. Don’t permit employees to leave a message before anyone is in the office. At a minimum, require the employee to leave a number of where they can be reached for a follow-up call.
Decide if PTO days should rollover into the next year if unused. Some employers believe employees should take all of their vacation.
Include the consequences that may arise from repeated PTO abuse and misuse. Since it is virtually impossible to list every single potential offense, keep the policy flexible.
However, drafting an effective PTO policy alone is not going to reduce employee abuse of PTO and excessive absenteeism. Communication is the key to making your PTO program work.
In most companies, immediate supervisors are primarily responsible for managing absenteeism and are often the only people aware when certain employees are absent. Managers and supervisors are in the best position to notice a problem of PTO abuse at an early stage and to understand the circumstances surrounding an employee’s absence. Therefore, it is pivotal that managers and supervisors are actively involved your company’s absence procedures. This requires employers to train supervisors on your PTO policy and how to handle situations where employees request leave.
Some critical actions supervisors should take to manage absenteeism include the following:
Ensure all employees are fully aware of your company’s PTO policies and procedures to handle an absence.
Be the first point of contact when their reporting employee calls in sick.
Maintain accurate, up-to-date and appropriately detailed absence records for their reporting employees that include the reason for the absence, the date expected to return to work, and a doctor’s note if necessary.
Identify any trends or patters of absences of reporting employees that cause supervisors concern.
Implement disciplinary procedures when required.
Overall, the costs and side effects of unplanned absences and PTO can be controlled if your company makes it a priority to implement a clearly written PTO policy, provides training to supervisors regarding your PTO policy, accurately document incidents and stop abuse of the system. Not only will dealing with employee PTO abuse reduce unwarranted costs to your business, but it will make the workplace a more productive environment.