Paid leave offerings vary at Iowa businesses
Flexibility, benefits of PTO help keep employers competitive
When Benjamin Detweiler realized his newborn son would need heart surgery, he worried about the costs involved as well as his balance of paid time off from work.
Detweiler, a customer care supervisor at ImOn Communications in Cedar Rapids, had saved up about a week and a half. But he faced the scary possibility that his income would drop off at a time when he needed it most.
Iowa businesses structure their paid leave benefits a variety of ways. Some offer vacation and sick time separately, while others lump everything together as paid time off (PTO). At some companies such as ImOn, employees can donate their PTO in hourly increments to co-workers facing a medical emergency in their immediate family.
Several employees at ImOn stepped up to help Detweiler.
“It was completely overwhelming when I found out that people were doing that,” Detweiler said.
Jeff Janssen, director of sales and marketing at ImOn, said many of the company’s 80 employees have donated time to other employees in need. In recent years, the families of two employees who were battling cancer have benefited.
The company itself doesn't experience any negative effects in allowing the transfer of paid time off, Janssen said.
“It doesn’t really cost the organization much in terms of time or money,” he explained. “It’s a pay out of time, but usually that’s a liability on the books anyway, so it doesn’t really impact the organization, and it really is a way to help out a fellow employee.”
Another policy at ImOn allows employees to use PTO to volunteer at a charitable organization in the community. Up to 24 hours can be used per year.
Eight hours are activities sponsored by the company, and 16 hours are available to use at the employee’s charity of choice.
“It allows them to pursue things in line with their passions or charitable organizations that they have interest in or belong to,” Janssen said.
In Iowa, about 34 percent of employers offer PTO, rather than separating vacation, sick and personal days, according to a fringe benefit survey of more than 7,000 businesses conducted in 2012 by Iowa Workforce Development. On average, 10 PTO days were offered to full-time employees in their first year of service, and 14.2 PTO days for employees with 5 to 10 years of service.
Of the employers who responded, some 84 percent offered paid vacation time to full-time employees, and about 56 percent offered paid sick leave.
The United States lags behind other countries in the amount of annual leave offered to employees. Some countries have federal laws that guarantee PTO.
One 2007 study dubbed the U.S. the “No-Vacation Nation.”
New employees at the architecture and engineering firm Shive-Hattery are offered different amounts of PTO based on their education and professional experience. Human Resources Director Tina Kueter said the flexibility helps the company compete for the best employees.
“If you’ve got 10 years of experience, we’re not going to start you out with two weeks of PTO,” Kueter said.
Shive-Hattery always has offered PTO time to its employees. Keuter said offering sick time, vacation time and other paid leave separately could be a “nightmare” to manage.
“It gives employees the ability to manage their own time instead of us trying to manage it for them,” Kueter said. “They’re adults.”
Advantage Companies, which employs 45 in Cedar Rapids, converted to a PTO system at the start of the year, moving away from separate sick and vacation days. Employees can accrue a maximum of 160 hours, and it carries over to the next year.
The records-management company's human resources director, Jennifer Lawrence, noted the change has streamlined processes, with less tracking involved.
“It’s definitely administratively easy,” Lawrence said. “It’s easier to track.
"We don’t have use-it-or-lose-it policies with it, and we don’t have carry-over (restrictions). It’s just, here’s what you accrue, and here’s the maximum.”
Employees seem to appreciate the flexibility, she added. Hourly workers can take time off by the hour, and salaried employees can be gone half or whole days.
PTO benefits can help smaller companies level the playing field when they are competing for employees, Lawrence said.
“As a small employer, we’re never going to be able to pay and have the deep pockets like a large employer, so we use PTO as a way to make us an attractive employer,” she said.
Lawrence expects employees will take about the same number of paid days off as they did before the switch. Advantage Companies will evaluate the program at the end of the year to see if any tweaking is necessary.
The right arrangement depends on the particular company, she contended, and whatever program is used must be applied carefully.“You still have to have some kind of policy around unscheduled absences, and when does that hurt the business,” Lawrence said. “I think it makes people a little more productive, knowing that they have a flexible benefit.”