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Improving employee benefits: PDO plan replaces vacation policy.

We live in a time when offering super-sized benefits is one of the essential keys to retaining employees and avoiding unnecessary turnover. While compensation and other benefits matter just as much, finding new, inventive ways to handle vacation or time off for your staff is becoming more difficult in our 24/7 environment. Magazine Publishing Group (MPG) believes it has found the answer.

After studying several vacation plans, we arrived at some surprising conclusions. One was that there was no norm. One week after one year of employment, no sick pay, or pay for holidays was not uncommon. We decided on a plan implemented successfully in hospitals where there is no differentiation between sick, vacation and holiday days taken off. With this plan, you earn one paid day off (PDO) for every two weeks worked. Regular 12-month employees accrue PDO time at the rate of eight hours per 80 hours of service, beginning with the effective date of employment. Employees terminating before completing 90 days of service receive no PDO benefits.

Under ordinary circumstances, an employee will be expected to use approximately 80 hours of PDO time per year, taken at any time a manager approves it. Scheduling PDO time is consistent with the interests of the employee and employer, and requires advance approval of the office manager and employee's immediate supervisor. Full-time employees are required to take time off each year. They are asked not to call in or check their email, which seems to bring them back to work more refreshed with more creative ideas. Unearned days taken off are unpaid. Unpaid days off are governed by the attendance policy.

What is a PDO?

PDOs are available for eligible employees. Every pay period (after your first 90 days of employment), employees accrue PDOs. In general, the PDO Plan is a program designed to let its employees take time off from work and still get paid. However, the PDO program can be varied for full-time or part-time employees. After working at MPG for 90 days, the staff is eligible to take time off and get paid for it. Before the 90 days, employees may take approved time off, but PDO money will not be paid for this time. The plan can be altered to fit the company by changing the length of time it takes to qualify for PDO each year. It could be 90 days every year for example.

One of the nicest things about the PDO plan is that it doesn't matter why you need the time off. For example, you could be sick or vacationing and either one counts as the same thing--a day missed from work. The PDO plan allows eligible employees to use their time off for virtually anything, as long as a manager or supervisor approves the time. This time will be compensated from the PDO fund if the employee has accrued enough funds to cover it in their account. Conveniently, rudimentary payroll packages like QuickBooks will track the PDO time earned.


Year End Holidays and Jury Duty

The PDO plan can start accruing days off in July each year to make sure an employee has PDO days accrued to be off at the end of the year, or these days can be specifically reserved. The PDO plan is especially effective during the year-end holidays because of the variety of needs to be off at this important time of year. The PDO plan can also make an exception when an employee has jury duty.

PDO When the Employee Leaves

Should employment come to an end, the employee is paid the remaining balance of his or her PDO account. Employees who resign after providing proper notice to their employer will receive all current PDO benefits. However, PDO may not be used in lieu of notice of resignation or after notice is provided.

This new PDO plan gives employees the flexibility they need to manage their time effectively. It is a flexible plan that allows them to use time off whether they need it for sickness, vacation, holidays or bereavement. The longer the employment, the more time off accrued. As an added benefit, the employee either can have the money (that exceeds the required 80 hours taken off) to cash out at the end of the year or have it roll over to the next year. The plan is designed to work for employees while maintaining a consistent application and procedure for each employee.

How do you handle vacation and time-off policies? Send me a note and we'll publish your responses in an upcoming issue.

T. Allen Rose is editor/publisher of this publication. Contact him at
COPYRIGHT 2004 National Society of Public Accountants
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2004 Gale, Cengage Learning. All rights reserved.

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Title Annotation:Magazine Publishing Group's paid day off
Author:Rose, T. Allen
Publication:The National Public Accountant
Geographic Code:1USA
Date:Oct 1, 2004
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