PTO announcements falls into 3 buckets:
- You’re adding more benefits. These are great. Tell people what they’re getting, stick to the facts, and that’s it.
- Policies are changing and everything is about equal. Some people won’t be happy but that’s always the case. Be super clear on details and timelines to keep the confusion down.
- You’re taking PTO policies away. Strap in, this announcement is NOT going to be fun. I assume you have a really good reason for doing this. If not, maybe avoid it altogether.
I’ve put together an announcement template for each.
PTO Policy Change Announcement – Good News Template
For good news, you really can’t mess it up. Just make sure to not over promise anything. And keep things concrete so people don’t misinterpret the policy as being better than what you have planned.
Subject: Change to Our PTO Policy
Hey everyone,
I’ve got great news, we’re making some additions to our PTO policy.
The following changes will be effective from [date]:
[List changes in a clean list format]
- Our PTO accrual rate will increase from 0.02 hours of PTO per hour worked to 0.04 hours of PTO per hour worked.
- This will increase your annual PTO from about 1 week per year to 2 weeks per year.
- You’ll see the increase of the higher PTO accrual rate on your pay stub for the payroll that we process on May 31.
- You don’t need to do anything. Our payroll system will automatically update everything.
These changes will affect [team members it will impact, such as part-time and full-time hourly employees only.]
The entire policy is documented here: [link to the policy in your company wiki or where ever you keep your employee handbook]
We’re all super excited by this. If you have any questions regarding these changes please reach out to [your main HR contact or email].
[Sign off]
PTO Policy Change Announcement – Neutral News Template
The main goal here is to reduce confusion. Change is always a bit painful but confusion really amps up the discomfort. Clearly explain the new policy and the steps for how to get there. Also assuage fears so people know that nothing is being taken away from them.
Subject: Change to Our PTO Policy
Hey everyone,
We’re making some changes to our PTO policy. I want to clarify those changes so everyone knows exactly what’s happening.
[Briefly describe the old policy]
Previously, we offered PTO in a lump sum format. Everyone received 15 days of PTO on January 1st that they could use throughout the year.
[Briefly describe the NEW policy]
Going forward, we’ll be using an accrual method for PTO. Every hour you work, you’ll earn PTO hours. Once you’ve accrued PTO hours, you can use them however you like.
[Assuage fears by saying nothing is being taken away]
Under the new system, you’ll still have 15 days of PTO per year. The only thing that’s changing is how and when people have access to their PTO.
[Explain the benefit of the new system and why you’re changing]
We believe this accrual model will be a lot easier for everyone. You’ll consistently accrue new PTO, so you’ll always have more PTO right around the corner. We’ll also avoid the holiday crush of PTO requests from our old model as everyone tries to use PTO at the end of the year.
Here’s exactly how the new PTO system will work:
[List details in a clean list format]
- You’ll accrue 0.058 hours of PTO per every hour worked, so 120 hours per year. That’s 15 days of PTO per year.
- PTO can be used for anything you want.
- We will have a PTO maximum of 120 hours. Once you have 120 hours, you won’t accrue any additional PTO until you use some.
Here’s what the transition to the new system will look like:
[Go through exact steps and dates that people need to know for the transition]:
- No PTO us being taken away. You can continue to use the PTO hours you have.
- On January 1st, the new accrual system will begin. No lump sum hours will be given this coming year.
- If you already have PTO hours, accrued PTO hours will be added on top of what you already have.
- Our PTO cap will be used for everyone, regardless of how much PTO is being carried over from our previous system. So once you hit 120 hours, you won’t accrue any additional PTO until you use some of it.
These changes will affect [team members it will impact, such as part-time and full-time hourly employees only.]
The entire policy is documented here: [link to the policy in your company wiki or where ever you keep your employee handbook]
If you have any questions regarding these changes please reach out to [your main HR contact or email].
[Sign off]
PTO Policy Change Announcement – Bad News Template
This change announcement is all about damage control. There’s going to be blowback so your goal is minimize the pain for everyone. State the change clearly, be super direct (bordering on clinical), and rip the bandaid.
Subject: Change to Our PTO Policy
Hey everyone,
The following changes to our PTO policy will be effective from [date]:
[List changes in a clean list format. This example is for a company reducing a lump sum PTO policy from 15 days/year to 10 days/year]
- Each year on January 1st, employees will receive 10 days of PTO to use throughout the year.
- There are no other changes to our PTO policies at this time.
These changes will affect [team members it will impact, such as part-time and full-time hourly employees only.]
The entire policy is documented here: [link to the policy in your company wiki or where ever you keep your employee handbook]
If you have any questions regarding these changes please reach out to [your main HR contact or email].
[Sign off]
Can Companies Change Policies Without Notice?
In the vast majority of cases, companies can do whatever they want with PTO. And that means taking it away without notice.
There are a few exceptions. Colorado has a PTO law that prevents PTO from being taken away for any reason. Companies don’t have to offer PTO but once someone has PTO, it can’t be eliminated until it’s used or paid out.
Some states like Massachusetts consider vacation time to be earned wages. So it can’t be taken away without being paid out.
Many states don’t even have sick leave laws. And VERY few require PTO, Nevada is one of the only ones.
The other thing companies need to watch out for is that their policies get applied equally across the company. Otherwise they could have a discrimination claim to deal with.
Outside of those exceptions, companies can change their policies at any time and for any reason.
Avoiding a PTO Mutiny: Always Give, Never Take
The cardinal rule for changing any PTO policy: only add to the existing policy. Never take anything away. This applies to all benefit programs.
In 2022, the University of Missouri sparked protests when they made cuts to time off that equated to workers losing ten days of PTO.
The union representative for those workers at the University of Missouri said “Just from the signatures alone that we’ve received, people are very clear that the time off is one of the few reasons they work here.”
Take away PTO and employees are going to be pissed. It’s well documented that the pain from loss is about twice as bad as the joy from gains. It’s called loss aversion. So if you give a PTO benefit, then take it away, everyone is going to be way more disgruntled than if you did nothing.
My rule for all benefit programs: only roll out a new benefit if I’m 100% sure I’m never going to reverse it. And for benefits that I’m unsure about, find small ways to test it out.
This is how I avoid having to send bad news PTO policy announcements. In fact, I don’t think I’ve ever had to do this across any of the companies where I held a leadership role. I’ve always been super methodical when expanding benefits programs.
Common Mistakes Companies Make When Announcing PTO Changes
Here’s the common mistakes I see folks making with their PTO announcements.
1. Using Management Mumbo Jumbo
What’s management mumbo jumbo?
Here’s an example: “We regularly audit our PTO policy to ensure we’re supporting your well-being and happiness while meeting company goals. We considered the existing policy carefully, along with your feedback. “
What? What does this mean?
NOTHING. It means absolutely nothing. That’s management mumbo jumbo. At best, you make everyone fall asleep. At worst, you get a massive eye roll and chip away at your credibility.
Cut all the management speak and pie-in-the-sky explanations. Just explain what’s going on clearly and directly.
2. Adding Generic or Fake Justification
When announcing a policy change, we all have the urge to explain it. I certainly do.
The problem is that folks are REALLY good at seeing through fake justifications. Even a justification that’s too generic will create a negative impression.
The hardest part is that justifications always feel a lot stronger to ourselves than they do to the rest of the company. We were involved in the new policy, we created it, and our brains are doing a LOT of work to rationalize why it’s a good idea. What I think is an “okay” justification comes off as weak and silly to everyone else.
Stick to justifications that are rock solid. Like “a new state law is mandating this change” or “not enough people take time off and we want to encourage everyone to get the rest they need.”
And if you don’t have a strong justification, that’s okay. You don’t need to justify every single change.
3. Adding New PTO Policies Too Fast
This is how you avoid taking away PTO benefits later on and really making everyone angry.
Whenever you’re considering a new PTO benefit, go really slow. Test it, trial it, start small. Only roll it out in full once you’re 100% happy with the results and never want to remove it.
During the first few years of my company, we did ad-hoc winter breaks. December would roll around, we realized that no one was going to do any work over Christmas anyway, and we gave everyone 2 weeks off.
The first 2 times we did this, we said it was a one-time thing. We didn’t know if we were going to do it the following year, don’t expect it, just enjoy it this year.
After doing it 2 years in a row, our leadership team decided it was the right call and we should do it every year. That’s when we rolled out our official Winter Break PTO policy: at least 10 days of PTO during the Christmas and New Years holidays. People loved it. And the impact on the business was minimal.
I’d take a similar approach with any PTO policy I wasn’t 100% confident in. Try it for a year or two, make it a one-time thing, and test it out.
4. Not Having a Source of Truth for All PTO Policies
Sending out an email for a policy change or announcing it at a company meeting are great ideas.
But that’s not enough.
Every company needs an internal location that has all your policies spelled out. I always use an internal company wiki for this. The tool doesn’t matter, what matters is that all your policies are in a single location.
When you make changes, also post those changes to the wiki. You might have to break out different sections for the old and new policy, that’s fine. Just make sure that it’s always updated.
This will cut down on the confusion immensely.
5. Taking Away PTO
Even though many companies can legally take PTO away, I strongly recommend against it.
First, it’s horrible to do to employees. They played by the rules, did what you asked, and then they got punished for it.
Second, some states and cities do have regulations around PTO and vacation time. If you make a mistake and miss a regulation for one of your employees, you could have a wage complaint on your hands.
Once PTO is earned, I never take it away. But I do believe in PTO caps to phase out old PTO systems. They’re also good practice to encourage people to use PTO.
Let’s say you never had a PTO cap and some employees have banked 200+ hours of PTO over the years. They never took vacation. A PTO cap is an easy way to phase this out without making anyone angry.
Tell everyone that PTO will no longer be earned once someone has 120 hours banked (I used this cap myself and it worked great). If someone has over 120 hours, they get to keep those hours. Nothing is being removed. But they won’t earn any more until they’ve used their PTO and are under the cap.
You will get a few employees that prefer to hoard their PTO until they eventually leave the company. But for everyone else, they’ll smoothly transition into the new PTO system without anyone being angry about it.
6. Failure to Give Advance Notice
Yes, most companies can make whatever changes they want to their PTO policies, whenever they want.
Doesn’t mean that’s a good idea.
If you’re going to change your PTO policies, you really need to give people a heads up. Most employees put a lot of effort into balance the demands of their job, their families, and their personal needs. They’ve already played Tetris with their PTO for the next 3-6 months to make it all fit. When a company changes PTO without notice, all those plans get derailed.
Most folks can absorb change as long as expectations get set ahead of time. Do the right thing and let people know what’s coming.
7. Not Having a Single Point of Contact for Questions
Whenever you’re changing PTO policies, tell people who they should go to for questions. If at all possible, make this a single person. There’s a few advantages to this:
- For HR items, people should always have someone they can go to other than their manager. Even with strict recruiting, some managers are just terrible. People need a resource for when their manager isn’t good enough.
- People trust people, they don’t trust nameless corporate accounts. By having an individual to reach out to, they’ll ask better questions and give more honest feedback. This is the info you need to make your policies better over time.
- When one person gets most of the questions and feedback, it’s a lot easier to spot the trends. As a leader, you’ll get better info and can then make better decisions on future changes.
Even if you’re super small and only have a few employees, tell everyone to go to yourself. Or one of the owners/founders. Whoever is best qualified.
And if you have a large HR team, try to pick a single person on that team.
Obviously, if you’re a massive company, all these systems break down and you probably have to rely on a role-based email or form. Do what you can.
