Two Major Considerations when Implementing Global PTO Policies
A growing number of companies are expanding and branching out globally. With these new business plans, comes new strategies for equitable employee benefits. Due to different regulations and compliance around the world, there are a couple of important factors to consider, specifically when looking at global paid time off (PTO) plans.
If you are looking to expand your workforce globally, you’ll likely encounter statutory laws or regulation related to time off. The regulations regarding time are so important, and the employees hired in these locations need to feel valued and not taken for granted.
If you want to have a standardized vacation or time off policies for all, in many cases, this is not possible.
Also, suppose you want to avoid the tier workers who accrue too many vacation leave days when you come toward the end of their employment. Maybe you need to cash out, so at the end of the year—you go into carryover limitation PTO. That’s a financial decision, and it’s perfectly fine. You also want to limit your financial liability. However, in one country it can work out, and in some other countries it’s not legal to apply this limitation.
Let’s take the issue of encouraging vacation days for your employees. Different countries have different laws and perspectives on that practice. In Israel encouraging vacation time is a best practice, with a minimum required days of 12 per year. But in the U.S., there are no requirements for paid time off.
From that perspective, when considering a time off plan, it’s important for employees to know and understand that every country has its own regulations and legal guidance. Your leadership may want to standardize the global workforce, but it’s almost important to understand the limitations of those requests.
Another area of concern centers around the growing trend of unlimited PTO, which can cause problems because once you have unlimited PTO, you may think there’s no need to track the days off an employee has taken. But in several countries, there is a statutory requirement that includes a minimum requirement for a specific number of days off workers are legally required to take.
If you are granting unlimited PTO, that’s perfectly fine, but in all cases it’s best practice to keep track of those unlimited days off.
Another risk comes in at the end of employment. If you are not tracking your workers days off, someone can say that they didn’t take any PTO—and depending on the laws in their country of work, they may be owed compensation for the mandatory required days under his or her local laws.
A Simple Solution to Cover a Bigger Challenge
Time tracking is the easiest way to avoid complications with your PTO compliance. Even if time tracking is not a legal requirement, you should still look at your employee’s hours.
Also, overall make sure you choose a global solution to track time and absences (PTO) – that enables you to adjust your global policy if there is a specific country requires it.” Another thing to watch for is COVID-19 changes. For example, so many employers began to apply absence management/time tracking, but then, during the height of the pandemic, they quit tracking employees work hours.
These are two important aspects that I witness from my perspective as a Business Operations Manager for Papaya Global. Companies want to standardize PTO benefits, but sometimes a complete standardization is not possible due to local laws in different countries. The most important aspect of policy implementation is to make sure your policy is compliant in each country.
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