Proper tracking and accounting of employees' work time and time off bring many benefits to the company.
Time tracking (time records) means counting the hours an employee has worked when carrying out assigned duties and those used in due vacation or sick leave. The company's laws and internal work regulations, such as the vacation policy, specify what the term „working time” means.
Time records are maintained in order to calculate an employee's payment and give an employee the correct number of days off. The employee is entitled to request the employer to inspect the records.
Keeping records of the working hours of employed persons applies to every employer. However, the form of the document is arbitrary – it can be kept on paper or electronically. There are also no legal recommendations as to the method of working time tracking. It all depends on the regulations of the country in question, and you should familiarize yourself with them, especially if you are hiring employees from other countries.
Paid time off is a period when an employee does not perform their duties – they take some form of vacation or sick leave, and yet they receive their due compensation.
At this point, we need to clarify some terms. Paid time off, granted in the form of vacation or sick leave, is governed by labor law and applies to contracted employees. However, thanks to the changes in the labor market over the past few years (global pandemic, new generation of workers, development of technology), a new concept of paid time off have emerged. These are additional paid days off as an employee benefit. Employers offer them not only to full-time employees but also to those employed under civil law contracts.
Paid time off can take various forms. Let's discuss some of the most important ones.
Annual leave is a break from work to which an employee is entitled by law. Employees shall receive the same compensation for taking such leave as they would receive for performing their professional duties.
Special leave is a break in work that an employee may request for several days, resulting from a particular situation – the birth of a child, a wedding, or the death of a family member.
Public holidays are fixed and floating holidays defined by relevant regulations. During such days, an employee does not have to work or can work if they are subject to the law. The name of this type of PTO may vary in different countries – it all depends on the country's political system.
Duvet day is a form of PTO. It can be requested by an employee not because they are ill but because they need some time to rest. However, he cannot start taking leave on demand without the employer's consent.
Sick leave is an employee's excused absence for which they will receive reduced pay (sick pay). Relevant laws regulate all the details of how sick pay is accounted for and who can benefit from it.
Child care is an absence treated on a par with days when the employee performed work. On the other hand, maternity/paternity or parental leave are the excused absences for which the employee will receive reduced pay (just like sick leave).
Each country provides its citizens with various forms of leave. Some are related to the specifics of a particular industry. For example, other forms will be due to physical workers and others to white-collar workers. Often, employees can also request unpaid leave.
The law obliges employers to follow the rules in keeping time records and providing employees with days off. Fortunately, they also leave some leeway in establishing work regulations so a company can adapt them to its own needs, such as the specifics of its industry.
A well-thought-out paid time off policy can bring many benefits to a company. These will include:
Increased employee productivity – proper scheduling of days off provides employees with time to recuperate physically and mentally. Better well-being of the employee means the greater motivation to work and creativity, and also – greater efficiency.
Saving the company's resources – rested employees - confident in their pay, who feel that the employer respects them - are less likely to think about changing jobs. The turnover rate goes down, and the risk of burnout in the team also disappears, so the company does not incur the cost of new hires, severance pay, or downtime due to unplanned absences.
Positive employee experience – granting paid time off to employees is a sign of respect and confidence in employees. That increases their trust and loyalty to the employer.
Positive candidate experience – an employer that respects the employees and their right to rest will attract more talent in the recruitment process.
Work-life balance – a well-thought-out Paid Time Off Policy allows employees to maintain a work-life balance.
Strengthening team relationships – the company can provide additional paid time off for organized team activities that do not involve work duties but integration activities with pursuing common passions. As a result, team members get to know each other better and build relationships.
An interesting solution gaining popularity in the labor market is offering employees additional paid time off as an employee benefit. How does it work? A company can offer unlimited paid time off – Waalaxy has already decided on this step, while Microsoft has also done it in 2023 – or individual paid days off, such as for well-being or menstruation. Some companies also offer additional paid time off, for example, as part of special campaigns to take care of employees' well-being.
Creating a paid time off policy in a company is quite a challenge. Many factors influence its shape – the law regulations, the specifics and seasonality of the industry, market practices, the company's location, the company's financial capabilities, etc., and the HR department must take them all into account. To make time management more efficient, it is worth automating it with the right HR software. It can be a mono-functional mobile app, such as a simple time tracker – a popular solution in small companies. It can be a multifunctional time-off tracking system or a module of an HRM system.
PTO tracking software required features are:
fast speed connection;
readable terms and conditions;
visualization of the time-consuming nature of a given project or task.
Time tracking software:
records the working time of each team member and enables calculation of salaries;
helps determine the actual performance of employees for selected projects or tasks;
facilitates the scheduling of work in specific periods, such as during high or low seasons;
facilitates the correct accounting of employees' vacation pools and the proper distribution of paid days off over time, ensuring that employees get their due rest;
creates reports showing the actual use of resources in a given project, making it easier to manage it;
can motivate employees to organize their work better and be more efficient;
ensures the secure flow of confidential data, thanks to authorizations and encryption.
If the software runs in the cloud, it allows time recording from anywhere, giving the employer more control over remote employees. If, in addition, it is part of the company's HRM system, it allows one to see the whole history of an employee – from personal data to performance results and salary settlement. Such a cross-section of data enables better management of an employee's professional development.
Tracking work time and tracking an employee's paid time off are essential HR tools. Their skillful use will allow the company to organize teamwork better, thereby increasing operational efficiency and reducing business costs. Although determined mainly by legal regulations, both tools should be tailored to the company's needs. It can be done by:
creating work regulations, which will include an increase in the pool of paid days off;
by using the timekeeping automation software.
A company that respects employees by providing them with time to rest is a company that achieves better business results.