Browse Definitions :
Definition

PTO (paid time off, personal time off)

Paid time off (PTO) is a human resource management (HRM) policy that provides employees with a pool of bankable hours that can be used for any purpose. Also known as personal time off, the acronym PTO is generally used to describe any period of time that an employee is paid while taking leave from work. 

In a large corporation, a PTO policy typically bundles employees’ personal days off, sick days and vacation time in a single block of hours rather than specifying separate numbers of days allowable for each reason. PTO plans are used primarily in the United States, where there are no laws for minimum vacation time.

In addition to documenting the number of paid hours for an individual employee, a PTO policy might include what yearly rollover (if any) is allowed and whether or not time can be taken off in lieu of overtime. The policy should also specify whether or not an employee can cash out unused PTO when leaving the company. In the U.S., PTO policies are becoming more common, but employers must be aware of state laws to ensure that their PTO policy is enforceable. 

Some benefits of PTO:

  • Provide more vacation time for employees who don't use banked time for other things.
  • Employees can use the hours as needed when unforeseen situations arise, as long as the time is available.
  • PTO policy enforcement can serve as a recruitment incentive to attract employees.
  • More frequent, shorter vacations as desired can help maintain work-life balance.

Some disadvantages of PTO:

  • When an employee quits, management still has to honor paid time off commitments.
  • Multiple employees may want to take the same days off at the end of a year to avoid losing paid time off hours.
  • Employees may run out of PTO and be required to work while sick or lose pay.
  • The larger pooled number of hours can look like more time than it actually is to those employees who fail to consider that it covers all purposes.
This was last updated in March 2019

Continue Reading About PTO (paid time off, personal time off)

SearchNetworking
  • cloud-native network function (CNF)

    A cloud-native network function (CNF) is a service that performs network duties in software, as opposed to purpose-built hardware.

  • Wi-Fi 6E

    Wi-Fi 6E is one variant of the 802.11ax standard.

  • microsegmentation

    Microsegmentation is a security technique that splits a network into definable zones and uses policies to dictate how data and ...

SearchSecurity
  • MICR (magnetic ink character recognition)

    MICR (magnetic ink character recognition) is a technology invented in the 1950s that's used to verify the legitimacy or ...

  • What is cybersecurity?

    Cybersecurity is the protection of internet-connected systems such as hardware, software and data from cyberthreats.

  • Android System WebView

    Android System WebView is a system component for the Android operating system (OS) that allows Android apps to display web ...

SearchCIO
  • privacy compliance

    Privacy compliance is a company's accordance with established personal information protection guidelines, specifications or ...

  • contingent workforce

    A contingent workforce is a labor pool whose members are hired by an organization on an on-demand basis.

  • product development (new product development -- NPD)

    Product development, also called new product management, is a series of steps that includes the conceptualization, design, ...

SearchHRSoftware
  • talent acquisition

    Talent acquisition is the strategic process employers use to analyze their long-term talent needs in the context of business ...

  • employee retention

    Employee retention is the organizational goal of keeping productive and talented workers and reducing turnover by fostering a ...

  • hybrid work model

    A hybrid work model is a workforce structure that includes employees who work remotely and those who work on site, in a company's...

SearchCustomerExperience
  • Salesforce Trailhead

    Salesforce Trailhead is a series of online tutorials that coach beginner and intermediate developers who need to learn how to ...

  • Salesforce

    Salesforce, Inc. is a cloud computing and social enterprise software-as-a-service (SaaS) provider based in San Francisco.

  • data clean room

    A data clean room is a technology service that helps content platforms keep first person user data private when interacting with ...

Close