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 By Neil B. Gailmard, OD, MBA, FAAO, Editor July 1, 2009 - Tip #386 
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Employee Benefits: Paid Time Off

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Additional Information

This tip article will focus on employment benefits such as personal days, vacation and holidays. Of course, there are many creative ideas and there is no one right way to set employment policy. Some practices don't like the term sick days and just call them personal days. Some add vacation time into the mix. Some practice owners offer more paid time off based on seniority or number of hours worked and some offer bonuses if sick days are not used. Some practices allow personal days to accumulate, while others require that they be used each year and some simply pay for unused days at the end of the year.

It's all really a judgment call. Generous benefits can help foster a good relationship with employees, but they also increase costs. To some extent, it is important to consider what other employers do because your practice will be compared to them. There is really no exact standard, but it is smart to be within the typical range.

Perhaps more important than the specific rules of each benefit is that the rules are known by employees when they are first hired and the rules are applied uniformly and fairly. The descriptions of your benefits should become part of your office manual. Avoid changing the rules randomly as you go along.

Should you change?

Once you begin with a benefit or a policy, it can be difficult to change. I don't recommend taking away or reducing benefits unless you compensate by giving something new, such as additional benefits or pay. Another effective way to change your employment policies is to create a "grandfather clause" for existing employees, and make the new policy effective for all new employees. This allows the practice to adopt more efficient or cost effective rules for the future without changing senior staff who did not agree to the new terms when they were hired. This works well for employment benefits and for other points of contention, such as working evenings and Saturdays.

What is full time?

Generally, employment benefits are only provided for full time employees. I like to have an exact definition of what "full time" means. For example, our office manual reads: Full-time employment is defined as a minimum schedule of 32 hours per week (lunches excluded & Saturdays averaged). We use the scheduled hours as our guide, which is determined by management, not the actual hours worked.

Personal days and sick days

The typical small business will allow five or six personal and/or sick days per year for full time employees. Usually these days off are with pay, but they don't have to be. My practice allows five personal days off, but they are without pay. Vacation days may be used for days off with pay.

A big problem can occur if an employee calls in sick after his or her sick days are used for the year. Even though the time off is without pay, excessive call-offs place a large burden on the other staff members and morale suffers because it feels unfair. On the other hand, we want to be compassionate toward the employee who has a serious illness or has a string of legitimate health problems. We handle this by requiring a written doctor's excuse for every absence after the sick days and vacation days are used. Vacation days are not required to be used for illness but may be used if the employee wishes. Without the written medical excuse, employment is terminated.

My practice encourages trading days with other employees as a way to allow time off without impacting the practice.

Vacation policy

Here are the basic rules for vacation in my practice.

  • Two weeks of paid vacation is provided after one year of full time employment and three weeks of vacation after five years. One week is defined as five work days.
  • Vacations are compensated on the basis of 40 hours of pay per week. One day off shall equal eight hours of vacation pay, one Saturday off shall equal eight hours. Only four Saturdays per year can be requested as vacation pay.
  • Only one person may be approved for vacation from a department at the same time. Our departments are business office, patient care, optical dispensing and optical lab.
  • Employees are asked to submit requests for vacation between January 1st and 15th. During this time, vacation requests are granted on a seniority basis. If two employees request the same time off, it will be granted to the employee with the most seniority. After January 15th, vacation time will be granted on a first come first serve basis.
  • Vacation days cannot accrue into the next year. If an employee does not use vacation days, they are compensated as extra pay.
  • Part time employees may take vacation time without pay based on the prorated percentage of their normal work schedule.

Paid holidays

Six paid holidays are provided in my practice: New Year's Day, Memorial Day, 4th of July, Labor Day, Thanksgiving, and Christmas. The extra holiday pay is provided even if it falls on a Sunday or on an employee's day off.

Management makes decisions to close the office for additional days or half days surrounding these holidays based on the calendar. For example, if Christmas were to fall on a Friday in a given year, we would close the office on the day after Christmas (Saturday) to give everyone a long holiday weekend. If the office closes for additional days, that time off is without pay. Based on experience, I have found that our staff is generally happy to have the additional time off even without pay, but I am also sensitive to the need for continuing income and to our patients wanting the office to be open.

Best wishes for continued success,

Read Past Tips Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week

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Send questions and comments to neil@gailmard.com.

Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.

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