For employees, paid time off (PTO) is one of the most-valued benefits. However, employers don’t give PTO the same value. This shows a serious gap between what employees desire and what employers offer.
You shouldn’t underestimate the importance of PTO and how you handle changes to your existing system for paid time off. Employees give great significance to their time off and you should, too.
A change in PTO policy and its announcement should be positive and clear to avoid employee discontent. To help you get it right, I’ve put together a PTO policy change announcement template below, along with actionable advice.
PTO Policy Change Announcement Template
Here’s a useful template you can personalize with your own information or use as a model for your PTO policy change announcement email:
Subject: HR Announcement
At [company] 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.
As such, we feel a change is necessary to [reasons for making the policy changes, such as simplifying the existing PTO policy or making it easier for employees to use their PTO balance].
The following changes will be effective from [date]:
(List changes in a clean list format, for example:
1. We will discontinue the mandatory use of accrued PTO by the end of the calendar year.
2. Any unused PTO at the end of the calendar year may be rolled over and used in the following year.
3. You don’t need to do anything. [HR system] will automatically update your PTO balance. View your balance at any time on [HR System].)
These changes will affect [team members it will impact, such as part-time and full-time hourly employees only.]
For more information view the full updated policy (make sure to place a link in this sentence to new policy document). If you have any questions regarding these changes please contact us at [email or phone number].
The Most Important Thing for Avoiding a PTO Mutiny
The cardinal rule for changing any PTO policy is to only add value to the existing policy. Take away time or other benefits from the policy and you can expect serious repercussions.
In 2022, the University of Missouri sparked a petition and protests when they made cuts to benefits and time off that equated to workers losing ten days of PTO.
Benefits, including PTO, are vital for company culture and morale, retaining employees, and attracting new ones. Therefore you have to be careful with how you treat them.
Take it from the union representative for those workers at the University of Missouri, who 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.”
You run the risk of losing staff to another organization or company if you reduce their PTO.
Also, pay heed to the fact that PTO increases can’t be used as a temporary morale booster. The worst thing you could do is award generous benefits to your team and then retract them later due to budgetary reasons. So, take extra care and only make sustainable changes to your time-off policy.
PTO Announcement Timeline
The proper planning and development of a PTO policy change and announcement will help you avoid mistakes that result in unhappy workers. The process should take place as follows:
1. Conduct a PTO Policy Audit
Regular auditing of your policy will help leadership identify whether there’s a need for change. There are a number of aspects and qualities to check for, such as:
- Maintaining legal compliance
- Employees’ understanding of the policy
- Employee satisfaction
- How the policy compares to others in your industry
- How it impacts company productivity and goals
Create a report that uses current and relevant data and evidence to analyze these aspects. For instance, you might conduct employee surveys to get genuine feedback, as well as look at performance metrics such as employee turnover.
2. Leadership and HR Plan Policy Changes
If leadership decides changes must be made, they’ll then work with HR to come up with the finer details and how the changes will work logistically. You must come up with a set of written guidelines that can be added to legal documentation and circulated among staff.
These changes must be clear and specific. But, where appropriate, they should maintain enough flexibility to take individual circumstances into account. You don’t want to write yourself into a corner.
Administrative changes are more general and widely applicable in nature. For instance, there may be a company-wide change in the way PTO is logged. But other changes require flexibility, such as changes to bereavement leave policy, as situations and circumstances will differ from one employee to the next.
3. Circulate Policy Changes to Management and Supervisors
It’s important to share the details of policy changes with those responsible for implementing them. Managers, supervisors, payroll administrators, and others responsible for handling employee benefits and accommodating employees’ time away from work will need to understand precisely what is going to change and what they need to do to enable these changes.
For instance, managers may be instructed to approve more days of paid parental leave than they had previously. Or, payroll may need to update their software to account for wage changes and the like.
Ideally, you’ll consult with responsible parties before a final draft of the guidelines is written. They may be able to provide useful insights as to how your changes will work in practice and how they can be implemented.
4. Announce the Policy Change
The best way to announce a change in PTO policy depends on the size of the company and the type of change being implemented. A simple administrative change may just require an email, while a more complex change may require employee meetings with management, for instance.
It’s worth noting, however, that a change in PTO policy must always be given well in advance to reduce scheduling issues for employees and eliminate confusion.
To avoid errors and disagreements in the future, have employees formally recognize that they have read and understood a policy change. You may do this by having them fill out a form, reply to an email, or check a box on a web page.
It’s also important to make employees aware that they can contact management or your HR department with any questions they may have. You might also try to anticipate areas that need further explanation or instruction and prepare materials to assist employees, like an explainer video on how to use a new PTO form.
5. Implement the Policy Change
When the policy change goes live, send out a reminder to all employees that the changes are now effective. Give a brief summary of the changes outlined in the first announcement. Again, direct employees to the right resources, such as written documentation, for more information.
It’s important to monitor and later review the changes you made. You may wish to complete new surveys and gather further data then compare this to previous data sets such as employee satisfaction scores and so on. You’ll be able to see if the changes were positive or if they require further revision.
8 Common Mistakes Companies Make When Announcing PTO Changes
The way you communicate changes to HR policies matters. Take these steps to avoid employee discontent and workplace disruptions.
1. Failure to Comply with State Laws
There are no federal laws that regulate paid time off. However, certain aspects of PTO may be regulated in different states. You must check local laws before implementing changes to PTO that may be illegal in order to avoid being fined.
For instance, more than 20 states require a PTO payout of unused hours by law at the time of this writing. In some states, you must pay out unused PTO time upon termination. In California, Montana, and Nebraska, in particular, it’s illegal to implement a use-it-or-lose-it PTO policy.
2. Lack of Justification
Given the importance of PTO among employees, you must go beyond simply explaining what changes will be made. Explain why you’re making those changes. It increases the likelihood that employees will accept a new policy when, for instance, you explain that it’s being done to offer more flexibility or to make the policy simpler to understand.
This becomes even more important if the changes you make could be seen as negatively impacting employees. You can usually mitigate backlash if employees at least understand the rationale behind the changes being made, even if they don’t agree with them.
3. Lack of Clarity
Your policy change announcement must be detailed and clear. When employees don’t understand who it will impact, how it will impact them, and when, there’s more likely to be aggravation.
Let’s say that you decided to change the way in which PTO hours are accrued, but failed to share that it won’t affect hours accrued up until that point. There could be an adverse reaction when there needn’t be. Similarly, you don’t want part-time employees up in arms over a change that only affects full-timers.
In these instances, clear and specific information would prevent repercussions. Keep the language simple and straightforward enough for every employee to understand, avoiding jargon and slang.
4. Failure to Provide Further Resources
Making changes without providing further resources, direction, or support will result in a negative response. Be sure to maintain an open channel of communication.
By stating you’re available for questions, providing helpful links, or giving demonstrations when you anticipate issues and roadblocks, you’ll make your employees feel heard and appreciated, leading to greater job satisfaction.
5. Failure to Comply with Employee Contracts
If an employment contract outlines PTO policies and procedures, you should do your utmost to keep any original agreements or allowances.
If you make a policy change that impacts what was outlined in a contract (particularly if it will reduce PTO), then you’ll likely see employees leave the company. It’s akin to giving employees a generous benefit and then having to retract it at a later date. It just won’t fly.
It’s better to anticipate the potential for changes in advance. You can also protect yourself by adding a simple line such as “policies are subject to change after annual audits” in your employment contracts.
6. Making Negative Changes Before Exploring Other Options
One of the worst things you can do for company morale is to take away PTO or make changes that negatively impact PTO. Remember to only make changes to PTO policy that are sustainable so that you don’t encounter this issue in the future.
Even if a company has budget issues, employee PTO should be way down on your list of potential cuts. Reducing PTO could make the budget situation worse through employee churn, reduced productivity, and even the threat of strike. Consider making cuts elsewhere first.
7. Failure to Give Advance Notice
Some policy changes that don’t impact existing employees (such as hiring policies) may not need advance notice. But making employees aware of PTO changes before they’re implemented should be a given, as it has the potential to make a large impact on the current workforce and the overall climate in your workplace.
Employees need enough time to reschedule trips or align their personal schedules with the new policy. If they only see changes when they appear on their payslips or in the HR portal, that’s going to cause a lot of confusion and aggravation.
8. Lack of Personalization
Researching industry-wide policies to see how yours stacks up is important. But, you should never adopt a policy simply because another company’s HR team is doing it.
Any change to PTO policy should reflect your company, the resources you have available, and the atmosphere you wish to create. A large company of more than 1,000 employees, for example, may require a robust automated PTO request system, while a smaller company may be able to handle requests within the HR department easily.
Also, remember that the PTO policy should reflect a diverse workforce. Bear in mind that your employees may have non-traditional families. Don’t make changes that would exclude anybody from taking certain types of PTO, such as parental leave.