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Resource Center / Benefits & Perks

Voluntary Leave Programs in 2021 and Beyond

Creating a voluntary leave program that is compliant and serves your employees is crucial. Learn about the options so you can take a strategic approach.

The letter "J" for Justworks.
Justworks
Mar 12, 20216 minutes

When it comes to the benefits package that a company offers its employees, leave programs are significant pieces of that package. By working to ensure your leave programs (and other benefits) meet the standards of the current workforce in 2021 and beyond, you can increase how much talent your company attracts and retain the talent you already have. And with more top talent in your ranks, your business is more likely to see increased success across the board. That increased success alone is a great reason to consider implementing voluntary leave into your benefits package.

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When designing voluntary leave programs, it’s important to keep in mind the needs of your employees and organization, while also taking into account any compliance obligations that apply to your organization. Most employers that provide paid leave offer between one and three weeks per year to employees who have been with the firm less than five years. Some employers opt to offer more. The following programs can be adopted as you consider how to offer paid leave to your employees.

Paid Time Off

Paid time off (PTO) is one of the most popular approaches to voluntary leave. Rather than separating out vacation time from sick leave, this type of program provides employees with a chunk of time they can take off from work with pay. This time can be used for vacation, sick leave, or any other purpose someone might need time away from work.

There are several ways to set up and manage a PTO program. At some companies, employees accrue PTO each pay period, while other companies allocate a chunk of time at the beginning of each year. Unlimited PTO programs are becoming increasingly popular in some industries, including tech firms and others with a predominantly exempt workforce.

Vacation/Sick Leave Plans

Some companies offer paid leave plans that include allocating a certain number of days or hours for vacation or sick leave to employees — Justworks offers employees seven days of sick leave per year that is separate from paid time off. These programs tend to be the most common in organizations that allow a set amount of sick time to roll over from one year to the other, yet have a use-it-or-lose-it policy for vacation time.

Unlimited PTO programs are becoming increasingly popular in some industries, including tech firms and others with a predominantly exempt workforce.

Paid Holidays

Most organizations include several paid holidays throughout the year in their total benefits package. These paid holidays are typically set days specified by the company, and often represent days that the company is closed. According to the Bureau of Labor Statistics, non-governmental workers receive an average of eight paid holidays per year.

Floating Holidays

It is becoming increasingly popular for companies to incorporate floating holidays into their approach to holiday pay. This inclusive approach allows employees to choose when to take some or all of their holidays. This can benefit employees and the employer alike in a few ways:

  • It provides a way to meet the needs of employees whose religious or cultural observances fall on days not included in a standard holiday schedule.

  • It can be very beneficial for employers that don’t close on traditional holidays. Since not everyone will take time off at the same time, holiday staffing can be simplified.

Vacation Purchase Programs

Some employers establish vacation or PTO purchase programs that provide employees with an opportunity to purchase additional paid time off. These programs can be administered through a Section 125 cafeteria plan, which allows employees to purchase time off using pre-tax dollars and spread out the cost over a full year. Employers can also opt to allow employees to sell back unused PTO or vacation time in the same way.

Small Necessities Leave

For companies that don’t offer unlimited PTO, it can be very beneficial to provide employees with a pool of paid leave designated to be used for small necessities. This type of leave is designed to keep employees from having to dip into their PTO or vacation time when they need to take care of life obligations that only take a small amount of time, like going to the dentist or attending a child’s school program. A work-life balance benefit like this acknowledges the whole-person needs of employees, which is becoming increasingly important for jobseekers. This type of leave is actually required in a few states, but can be a good idea for employers regardless of where they are located.

Paid Volunteerism

Today’s employees want to work for socially responsible companies. What better way to demonstrate your organization’s commitment to doing good work than by allowing employees to use some of their company time to engage in volunteerism? At Justworks, employees can spend up to 40 hours of paid time off volunteering. Volunteer time off is especially important for companies that are seeking to position themselves as leaders in social responsibility, as well as those seeking to attract top talent and early career professionals.

Volunteer time off is especially important for companies that are seeking to position themselves as leaders in social responsibility.

Paid Parental Leave

Many organizations establish paid parental leave programs for employees who become parents. Companies have to comply with FML and applicable state programs, but it’s not unusual for organizations to go above and beyond what they are required to do. For many organizations, paid maternity or parental leave is an important aspect of their employee benefits package. This is especially important for companies that wish to be viewed as supportive, family-friendly places to work.

Bereavement Leave

Offering bereavement leave separate from your general PTO or vacation policy is another important whole-person benefit. Employees who have lost a loved one will appreciate working for a company that recognizes they will need time to cope with grief and loss in such a situation. Without this type of leave, the company may be sending employees a message that they are expected to continue to work without interruption as they are grieving.

Discretionary Leaves of Absence

No matter how comprehensive your leave policies are, there’s always a chance that a valuable team member could need time off from work for another reason. That’s why many companies include a discretionary leave of absence option in their benefits package. This type of program allows for companies to be flexible in situations that don’t fall under another specified type of leave, such as an injury or illness to an employee who is not yet eligible for FML, or a team member who is in need of a sabbatical. Justworks employees, for example, are eligible for a three-month sabbatical once they’ve worked at the company for five years.

No matter how comprehensive your leave policies are, there’s always a chance that a valuable team member could need time off from work for another reason.

Leave Programs for Team and Business Success

Consider how your company’s leave policies line up with those we’ve shared here, and how you might adjust to better meet the needs of both your team and your business. Whether you’re creating new leave policies or looking to run your current program better, the Justworks platform simplifies the process of creating and administering a leave program to streamline it for you and your team.

Thinking strategically is key when developing your leave and PTO policies. How you choose to design your company’s leave programs can impact all the aspects of running a business, including how much your employees succeed. And when your team succeeds and thrives, so too does your business.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.