Understand Different PTO Approaches - Knowledge Base | BerniePortal

Understanding Different PTO Approaches

Choosing the right PTO approach is crucial for creating a system that aligns with your organization's culture and operational needs. BerniePortal offers two distinct approaches, each designed to support different management philosophies and employee expectations.

Annual Allotment Approach
The Annual Allotment approach provides employees with a designated amount of PTO each year, featuring a clean annual reset that keeps administration simple and predictable.

Best for: Organizations that prefer clear annual boundaries and structured PTO management

Key features: 
  1. Annual Allotment
    1. Set employee PTO allotments as either a flat amount for all employees or tiered amounts based on years of service with the organization
  2. Multiple accrual options
    1. Choose how employees earn their time depending on the company's preference and cash flow considerations- Annually (all at once), quarterly, or monthly
  3. Annual reset
    1. Configure how unused PTO is handled each year—whether it's forfeited completely or allowed rolled over
    2. Reset timing can align with calendar year, fiscal year, or individual employee anniversary dates 
  4. Requests as time accrues
    1. Employees can only request time they've already accrued, preventing borrowing against future earnings and maintaining clear balance tracking
Example in action:
  1. Company policy 
    1. 12 annual PTO days (flat rate for all employees)
    2. 1 day accrued monthly 
    3. 3-day rollover maximum
  2. Scenario
    1. John ends the year with 10 unused PTO days
    1. At the start of the new year, John has 4 days available- 7 days forfeited (exceeded rollover limit), 3 days rolled over from previous year, 1 day earned for January


Accrual Bank Approach
The Accrual Bank approach creates a continuous PTO system without annual resets, offering employees greater flexibility through borrowing capabilities while maintaining reasonable limits.

Best for: Organizations that value flexibility and want to reduce administrative overhead while supporting work-life balance

Key Features: 
  1. Annual Allotment
    1. Same flexible allocation options as the Annual Allotment approach- flat rates or service-based tiers
  2. Multiple accrual options
    1. Identical accrual options- annually, quarterly, or monthly distribution of PTO earnings
  3. Negative limits (Borrowing)
    1. Set how many days employees can "borrow" against future PTO earnings, providing flexibility for unexpected needs or planned time off early in the accrual period
  4. Positive limits (Max balance)
    1. Establish maximum PTO balances to encourage regular time off usage while preventing excessive accumulation
  5. No annual reset/Continuous System
    1. No annual reset means balances carry forward indefinitely, with employees earning only their designated annual allocation each year until they reach the positive limit
  6. Flexible requests
    1. Borrowing capability allows employees to take time off even when their current balance is insufficient, as long as they stay within the negative limit 
Example in action:
  1. Company policy
    1. 12 annual PTO days (flat rate)
    2. 1 day accrued monthly 
    3. 3-day negative limit (borrowing)
    4. 15-day positive limit (maximum balance)
  2. Scenario
    1. John has 1 day accrued but needs 2 days off
      1. He requested his 2 day and they were approved, leaving him with -1 day balance
      2. He could still borrow 2 more days before hitting the -3 day limit
    2. Over a year has past, and John rarely takes any PTO- His balance now sits at the positive limit of 15 days 
      1. PTO accrual pauses until he uses some time off
      2. Encourages regular vacation usage while maintaining flexibility
​
Both approaches offer robust configuration options to match your organization's unique needs and employee expectations!

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