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Mini: PTO vs. Sick Leave · Why We Do What We Do

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  You're listening to why we do what we do? Welcome to why we do
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  what we do? Mini. I am your host Abraham, and i've Shane,
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  and we're talking about employers and employees paid time off versus sick leave.
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  Let's go ah, Yes, so I am fortunate to work in a place
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  that I've got both of these things. It's interesting because they are two very
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  different things that only people realize there is an important difference. Yes, Now,
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  let's give a quick hypothetical here. Let's say you're a salaried employee at
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  a business where you do get that paid vacation time as a benefit. There,
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  you're planning a family trip to a reunion to see family you haven't seen
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  in years, and as part of your planning, your reserve a rental unit
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  for the trip, You book your non refundable flights, and you make all
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  the arrangements for your pet and your house plans. Yes, one month before
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  your trip, unfortunately, you get horribly sick with an illness that puts you
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  in the hospital and prevents your work for nearly two weeks. That really sucks.
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  Yes, but it's okay. You get paid sick leave, except that
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  you didn't get paid sick leave. Instead, your employer applied your paid vacation
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  time to your sick leave. Now you don't have that paid vacation time left
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  to go on your trip. It's not good. So technically, technically PTO
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  can be used for anything. It's simply stated that basically it's paid time off,
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  not explicitly vacation days, so you can really use it for whatever.
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  And there are actually not any laws that mandate vacation time specifically, but most
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  employers offer some version of it. And this means that paid sick time can
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  also mean paid time off, So just kind of keep that in mind as
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  we go forward. All right, So let's get into the meat of this
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  discussion. And we've had a plan of what we wanted to talk to up
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  to this point, and there's just a lot to cover and I want to
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  make sure we have time to get to it in the context of a mini
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  So let's just unpack what's going on here. There's a lot of this trend
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  going on where employer is off or this paid time off PTO, and what
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  most people plan to do with that is use it as vacation time, so
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  they plan ahead of time that they're going to have vacation. Now, other
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  employers will often this sick leave, right, and sick leave is mostly applied
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  to unplanned time off, like you got sick, that sort of thing,
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  and they basically say, we're gonna we want you to take time away from
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  work when you're sick so that you don't get other people sick, et cetera.
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  So we're gonna make it so that if you get sick, you can
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  take the day or you know, every many days, you'll still get paid
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  for it. Don't come in if you're sick. Seems like a really good
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  idea in theory, right, right. Most organizations set it up that PTO
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  is earned as part of like how many like, either you get it as
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  part of your salary, part of your contract, or it's earned based on
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  the number of hours you work. Sick leave is usually set up to say,
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  hey, this is here if you if you are somebody who ask to
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  leave, it's, hey, this is here as an allotment just in case
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  you get sick. You have these as kind of a backup. And that's
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  usually how they're kind of arranged, exactly right. That is part of it,
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  and so it often means that like what happens is sick time is just
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  a sort of a yearly allotment, and if you go over that, you
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  just no longer get paid for taking time off for being sick. And you
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  can see why there would be practical constraints for employers who only have so much
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  to spend that like, they can't just keep paying people who don't come into
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  work and don't produce anything and don't contribute to the financial viability of that organization,
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  And so it makes sense to say this has got to be limited in
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  some capacity. Then, as you said the PTO, it can be often
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  different. As you said, it can be accruede. It can be like
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  you get a reserved bank of it that eventually think it can be drawn upon,
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  but then it resets the next year. There are even organizations apparently that
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  have a policy that literally says, take as much time as you need,
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  when you need, and it'll be paid time off as long as it's not
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  hurting the company. We will not even try and manage it. Basically,
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  there's just like when you need time, take the time you need an afternoon,
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  Take the afternoon you like, We'll make it available. And they basically
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  find that and we're not going to unpack this part of it. But in
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  those systems, people tend to not abuse that system. But where there is
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  concern is when people abuse the system. Right here's kind of an interesting thing,
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  though. Employers who offer PTO may not be required to honor that time
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  whether or not an employee takes it or I'm sorry, they may be required
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  to honor it, is what I should say. So, employers who offer
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  PTO may be required to honor time whether or not an employee takes it,
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  meaning that employers may have to pay out the money that would have been used
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  to cover the time that wasn't used. Kind of like if you don't use
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  your vacation and you have PTO hours, the company may still have to pay
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  you for those PTO hours. Right now, the employees who offer sick time
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  may be faced with employees who are constantly calling that sick because they can take
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  the day off and then they get paid for it. And you can see
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  where that would be very difficult, particularly for small businesses to handle because they
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  only have a limited workforce, so one person out could mean that like that's
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  a significant impact on their ability to kind of do business, and that means
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  other people might be covering that et cetera. And so what's happening. What
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  I've been seeing happen in a lot of places is that companies are using employees'
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  PTO, which is their vacation time in most instances, to cover their sick
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  time. So employee has an unplanned illness, they take a day off,
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  and their paid vacation time is now covering their sick leave. Yeah, so
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  that might be a problem, right. The idea is that it will reduce
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  people from using their sick time unnecessarily and so or like just taking time off
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  in general. But what happens when people really get sick. If you are
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  forced to use your PTO any event that you're sick, there is a very
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  very strong motivation to go into work while you're sick, because why would you
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  want to lose out on vacation time just because you got sick out of nowhere.
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  That is something that's out of your control. People don't want to burn
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  through their vacation days understandably, that's supposed to be time off, So why
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  would you, like, you wouldn't risk that so you would come in sick.
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  I had a really hard time finding all of the actual research on this.
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  Mostly what I found was people's policies. So we kind of have to
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  talk about this from understanding how reinforcement and incentive work to motivate particular type of
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  behaviors. After we have to listen to these particular types of ads. The
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  ads are kind of like our paid sick leave I guess in a way,
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  yeah, or some of the ads and they pay us yeah, and then
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  I don't know, you leave because you're tired of listening to them. That's
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  the sick lead part of it, that's the leaf part here. You think
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  of them, so you leave, and I hope that you don't leave stay
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  here, Yes, all right? Now important thing. I mean, I
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  think I'm sort of preaching to the choir with employees here, but employers who
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  listen, just like, consider what's going on here. Right. If you
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  incentivize people to come into work when they're sick by making it so that they
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  would otherwise be spending their paid vacation time on their sick time, that means
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  you've essentially completely undermined the whole idea of sick time in the first place,
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  which is the don't come to work and get everyone sick if you're sick.
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  Right, And so now what you've done is you've flipped it right back to
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  the original problem. You're basically saying, if you try and call it sick,
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  we're taking away your vacation days. And what does that incentivize. That
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  means that people who come in when they are actually sick, and when they
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  do that, several things are going to happen. One, they're going to
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  get other employees sick. Two, they could be getting their customers or other
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  like people who come in sick. Three they are likely to make more mistakes
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  in their work. And four, even if they don't make mistakes, you
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  probably see a diminished and probably overall poor performance at their jobs. So like
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  right, bad outcome. It's not good for anybody. It's not good for
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  anybody. So we know someone whose job has this policy. And when someone
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  got COVID, they came into work anyway because they didn't want to use PTO.
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  They gave their co workers COVID who then had to call out because of
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  this acidiine policy, and they had to actually shut down their business for a
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  day or two because no one will or could come into work because they were
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  all COVID sick. So did the company save money? No, it actually
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  costs them quite a bit of money because of that policy, because they incentivize
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  people coming in sick. Yeah, And I mean, if you imagine if
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  you get your customers sick or whoever, the patrons of your business, if
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  you will, like, they don't want to come in while they're sick,
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  and they might never come in again if they know you're the ones who got
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  them sick, they might you know, wolly grudge about that sort of thing,
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  and understandably too. Right. So there's a lot of things that are
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  happening here. There's a complex network of decisions that can be made that can
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  be costly for employers. I mean, that's kind of the thing is when
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  you are employing people, there are some cost to go along with it.
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  But let's consider where the incentives are when a policy does put it on the
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  employee to use PTO for the sick time. So we would argue that we
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  can give employees the choice if I'm really sick, then I would rather take
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  the unpaid day and then have to use my PTO. Then it doesn't cost
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  a business anything and you can still be certain that I am not malingering,
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  or that I'm also not coming in and getting people sick. That's kind of
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  a nice thing. Give people choices on how they want to handle that.
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  And if they're not really sick and they're just trying to take an unpaid day.
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  While that can be annoying, it still reduces the overhead of paying them
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  while they're not there. So like that is a way is as giving them
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  just the choice of like you can take a paid sick day or you can
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  take an unpaid sick day that could come from PTO potentially, not that that's
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  even the best solution, but just as a way to consider where the incentives
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  are currently aligned for employees and what they would do in those situations. Right,
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  And so you know this isn't going to work in every situation. Employers
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  just can't have a vauatle workforce, and it can't force other employees to constantly
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  double their work or cover for people, especially when they're doing other people's jobs
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  or they're covering for a position that needs to be filled. But incentivizing people
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  to come to work sick is ultimately the bad situation. Like if you set
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  it up so the people are more than likely to come to work sick,
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  then there's a different problem. Now there are other complex decisions that have to
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  be made. Inside of that, there's also things like for folks that are
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  chronically sick, and there's accommodations. Those are different situations. Is that's not
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  what we're talking about here. We're talking about somebody gets food poisoning and they
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  can't come into work and now they have to use vacation time to cover their
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  time with food poisoning. And that's more of like those acute illnesses that we're
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  talking about here. Yeah, very much so. And I think it can
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  be a little complex administratively, but it's ultimately going to save you more money
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  to have a better well thought out policy than to try and shotgun approach of
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  just like we're just going to spend all your vacation time, whether or not
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  you're here, if you're gone, we're spending your vacation time. Like that
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  sets up, right, such a wildly wrong way to go about it.
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  Like that's how you completely shoot yourself on the foot. I mean maybe as
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  we'll just get it hot hacks on, start cutting that foot off, yeah,
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  because like there's no there's no recovering from that buyfoot. Yeah, byfoot,
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  you're gone going the whole saw route. And so I think the thing
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  that makes the most sense is just trying to apply incentives in the right places.
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  So I think give people the choice if they want to take an unpaid
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  day. You could have sickly be available, but just have some policies around,
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  like at what point is it not available when people are abusing the system.
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  If you have someone who takes a sick day like every single Friday,
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  like they've got Friday disease and they need to take a sick day off every
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  single Friday or every single Monday or whatever, then consider like, either this
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  schedule isn't working for that employee and like you can shuffle some things around so
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  that they have the schedule that they're going to stick to, or this is
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  not a good fit for that employee and they like they maybe need to find
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  a job that has more accommodating to their schedule. Maybe offer four tens instead
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  of five eight hour shifts, you know, and then they can have a
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  four day work week and have a three day weekend every week. If if
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  you can handle that as a business, then like maybe consider that. But
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  like there's just consider having your policies arranged in such a way that it makes
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  sense if people are sick, take the sick time. If they want vacation
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  time, use your PO time. You can plan for PTO, right,
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  you can like make sure you have additional coverage. You can make sure you
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  don't have as many things scheduled that that person would need to do during that
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  time. But if you're going to force them to take PTO for their sick
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  time, things are going to go south really quickly. Yeah. Yeah,
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  and it's only going to cost you as the business owner. Yeah. So
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  we're saying this because it's impressive, how bad of an idea that it is,
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  that smart people are actually implementing these policies that are so dumb. But
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  also that like we want to try and give bring some awareness to like just
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  consider where you're placing incentives. If you take away people's reinforcers and make those
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  reinforcers available for the wrong behavior, you will get the wrong behavior guaranteed.
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  That is how behavior works. Period. You nailed it all, right,
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  Well, since I nailed it, I think that means that why we do
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  what we do Mini is out. It is cia. You've been listening to
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  Why we do what we do? You can learn more about this and other
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  episodes by going to wwdwwdpodcast dot com. Thanks for listening, and we hope
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  you have an awesome day.