Minimum PTO Policies
February 23, 2023
Minimum PTO Policies

Many employees do not use their allotted paid time off (PTO) despite their employers’ vacation and other leave policies. As a result, some employers are implementing minimum PTO policies to address this challenge. This emerging trend takes standard PTO policies one step further by mandating that employees take off a minimum number of days each year. When done properly, minimum PTO policies can help curb employee burnout, improve workplace productivity and strengthen attraction and retention efforts.


This article explores minimum PTO policies, including the potential benefits and organizational considerations for developing and implementing these policies.


What Is Minimum PTO?

Minimum PTO—also known as mandatory vacation or time off—is a policy that requires employees to take a minimum number of vacation days each year. While minimum PTO policies can vary by duration and the amount of time employees can take off, they generally take the form of an annual time-off minimum. These policies can establish deadlines for employees to use their PTO monthly, quarterly, seasonally or annually. Employees continue to receive their regular wages when taking time off.


Some employers require employees to take a portion of their minimum PTO over multiple consecutive days. This is known as a consecutive-day policy. For example, an employer may require employees to schedule five of their allotted 15 PTO days consecutively. This helps ensure that employees disconnect from work while away from the office, allowing them to use their PTO for something meaningful and return to work recharged. Consecutive day policies may also allow employees to take time off in smaller increments as long as they take one larger block of PTO each year.


Potential Benefits of Minimum PTO

Many savvy employers are transitioning to minimum PTO to help their employees feel happier and more satisfied at work, which can increase workforce productivity and reduce turnover. Minimum PTO not only encourages employees to use their allotted time off, but it can also strengthen organizations. The following sections highlight some benefits of implementing minimum PTO policies.

Improved Employee Well-being

Employees are an organization’s most valuable resource. By requiring employees to use their PTO, employers prioritize their workers’ mental and physical well-being. Minimum PTO can also help organizations strengthen employee loyalty since it can signal to workers that they’re not required to be online or work outside of expected hours. This can lead to employees feeling valued and, therefore, improve morale. Additionally, because minimum PTO policies help employees recharge, they can improve workplace productivity and safety. A rested workforce will likely be more creative, focused and careful. 


Workforce Needs Evaluation

Mandatory PTO allows organizations to evaluate their workforce needs and reveal potential issues. By requiring employees to take time off, employers can learn whether a particular employee is taking on too many responsibilities and if they need to hire additional workers. It can also encourage cross-training by allowing workers to take on new responsibilities and gain experience when their colleagues are away. This can enable knowledge transfer among workers and decrease the risk of losing vital information and experience when an employee leaves. Additionally, since minimum PTO requires all employees to take time off, it can provide employees with opportunities to report workplace issues that they might not otherwise do due to fear or intimidation, such as harassment and bullying.

Reduced Cashflow and Rollover Issues

Minimum PTO policies can provide a positive alternative to use-it-or-lose-it PTO policies. Many regular PTO policies allow employees to cash out or roll over unused PTO at the end of the year. Cash-outs can create cashflow problems for employers, and rollovers can lead to scheduling challenges the following year. Minimum PTO policies can help organizations save money on year-end PTO payoffs by avoiding cash-outs entirely and limiting potential scheduling issues from rollovers.

Alternatives to Unlimited PTO Policies

Unlimited PTO can be a great recruitment tool and may seem ideal for employees, but, in reality, it can be problematic. Employees often struggle to strike a balance between an acceptable amount and an excessive amount of PTO under unlimited policies. As a result, many employees take less time off than they would if their employers adopted minimum PTO policies. As a result, unlimited PTO can cause employee burnout, decreased worker productivity and increased turnover.

Additionally, unlimited PTO policies can be ambiguous or poorly designed, making it more difficult for employees to take time off. Some organizations may have unspoken rules about using unlimited PTO. This is common in industries with demanding work cultures, like banking and finance. These unspoken norms often dissuade employees from taking time off because they may feel unsure or guilty about stepping away from work. By requiring employees to take time off, employers signal to workers and applicants that they value work-life balance, which can improve overall attraction and retention efforts.

Considerations for Implementing Minimum PTO

While minimum PTO can help employees feel happier and more satisfied at work, adopting this approach can create scheduling challenges. Minimum PTO policies require employers to plan ahead because they must address situations where employees may be out for multiple days. In addition to potential scheduling issues, minimum PTO can create hardships for employees by requiring them to increase their workloads when their coworkers are away. This is especially true for small teams and businesses. Employers can address these issues by establishing PTO blackout periods during peak times or predictable busy seasons. They can also train managers to address PTO requests during popular times, such as during the summer and holidays.


When establishing policies regarding PTO usage and blackout periods, employers need to be consistent with how they administer and approve time-off requests. Employers can do this by establishing a written minimum PTO policy that provides employees with details about how to use and request time off. This can include the minimum number of days employees must use each year, whether any days need to be consecutive and the deadlines for using PTO (e.g., monthly, quarterly and annually).


Organizations need to consider how minimum PTO policies may negatively impact employees. Requiring employees to take time off may cause some workers to feel like they’re losing autonomy because their employer is dictating when they must work and when they must take time off. Additionally, forcing employees to take time off can disrupt internal workflow, especially if employees must take time off during the middle of an important project or right before a critical deadline. This could lead to increased stress for employees and create work-related difficulties.


Employers must ensure their minimum PTO policies comply with federal and state law requirements, including timekeeping requirements under the Fair Labor Standards Act. Many states and localities govern how unused PTO must be handled at year-end or when an employee leaves a company. Additionally, legally mandated paid sick leave is becoming more common throughout the United States. Employers need to ensure that their mandatory PTO policies comply with state and local laws regarding paid sick leave.


Summary

Minimum PTO policies can help create a happier and more productive workforce. While requiring employees to take time away from work can benefit employers and employees, it’s vital that employers weigh these policies’ benefits and compliance costs before implementing them to ensure it’s the right decision for their organization.

For more workplace resources, contact SimcoHR today.


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May 1, 2025
May is Mental Health Awareness Month , and it's a great time to reflect on the mental well-being of your team. As awareness about the importance of mental health continues to grow, many employers are seeking ways to support their employees. It’s crucial to recognize that mental health plays a significant role in an employee's overall performance, job satisfaction, and well-being. In the U.S., 76% of workers report experiencing at least one symptom of a mental health condition, and 81% say they’ll seek workplaces that prioritize mental health, according to the World Health Organization (WHO). Despite these numbers, many workers are hesitant to discuss mental health struggles, particularly when it comes to the workplace. As employers, it’s important to foster an environment where employees feel supported and understood. Here are some impactful ways to support mental health in your workplace, including a few creative strategies you may not have considered: Encourage Regular Mental Health Breaks and Downtime Everyone needs a moment to breathe, and it's important that employees feel they can step back when necessary to recharge. This might mean taking a short break or an afternoon off to reset mentally. Allowing employees to work at a more manageable pace when needed can help prevent burnout and chronic stress. When employees feel supported in prioritizing their mental health, they’re more likely to remain productive, engaged, and loyal over time. You can also encourage employees to take "mental health breaks" throughout the workday. These breaks can be as simple as setting reminders for short pauses to breathe, stretch, or step outside for a brief walk. These moments help employees clear their minds, reduce stress, and return to work more focused. It’s important to create a culture where taking breaks isn’t only accepted but encouraged, especially during stressful periods. By prioritizing both scheduled downtime and spontaneous breaks, you’ll help your employees maintain their mental well-being, leading to a more balanced and productive work environment. Offer Paid Time Off, Mental Health Benefits, and Flexible Schedules Offering paid time off and mental health benefits is not just about reducing financial barriers for employees—it’s about making mental health care more accessible. In many cases, employees may delay seeking help simply because they can’t afford to lose work hours or pay. Flexible schedules can also enable employees to attend therapy or make time for other mental health treatments that help them stay well. When employees know they have access to these resources, they’re more likely to seek help proactively rather than suffering in silence. This not only aids in their overall well-being but can prevent bigger issues from arising down the road, benefiting both the employee and the business. Provide an Employee Assistance Program (EAP) An Employee Assistance Program (EAP) provides employees with confidential access to professional resources for a variety of personal and mental health challenges. The beauty of EAPs is that they offer employees expert help without the stigma of speaking out at work. Offering an EAP ensures that employees can reach out for assistance on issues like stress, anxiety, addiction, or personal relationships—without fear of judgment or consequences. At Simco, we provide an EAP through our HR advisory component to businesses, giving employees a safe space to get the support they need, which ultimately leads to better employee engagement and a healthier workforce. Make Reasonable Accommodations When an employee requests accommodations for a mental health condition, it’s important to handle the situation with care and understanding. Engaging in an open and respectful conversation to explore how you can adjust the work environment, expectations, or hours shows empathy and commitment to their well-being. For example, an employee struggling with anxiety may request flexible hours to avoid rush hour, or someone with depression may benefit from a quieter, more isolated workspace. By providing reasonable accommodations, you not only comply with the law but also create an inclusive environment where everyone can thrive regardless of their mental health challenges. Create Digital Spaces for Friendships to Grow Loneliness, especially in remote or hybrid work environments, can exacerbate feelings of isolation and stress. While it’s easy to assume that working from home or in digital spaces means less connection, the opposite is often true. Employees can feel more isolated and disconnected than ever. One effective way to mitigate this is by creating virtual spaces dedicated to casual, non-work-related conversations. Encouraging employees to use virtual platforms for socializing or setting up fun, interactive events like digital coffee breaks or team trivia games can create a sense of camaraderie. In a remote setting, human connection doesn’t have to be lost—it can be enhanced by making it a priority through digital spaces. Promote Good Mental (and Physical) Health Supporting employees’ mental health means supporting their overall well-being. You can encourage mental health by promoting healthy habits such as mindfulness, yoga, or even simply taking a walk during breaks. These activities not only relieve stress but can also increase focus and energy levels. Employers can organize weekly wellness programs, invite yoga instructors, or even provide access to apps that promote mental well-being. When employees see that their workplace is invested in their physical and mental health, they’re more likely to reciprocate with increased engagement, satisfaction, and productivity. Normalize Conversations About Mental Health Creating a culture where employees feel safe to speak openly about mental health is crucial. It’s not just about providing resources; it’s about creating an environment where it’s okay to ask for help. Encourage managers and leaders to lead by example—when leaders are transparent about their own mental health or well-being, it opens the door for others to do the same. This can be achieved through regular conversations, check-ins, and creating a space where mental health is normalized as part of a healthy workplace culture. Reducing the stigma around mental health ensures that employees don’t fear discrimination or judgment when discussing their struggles. Leverage Additional Resources There’s a wealth of resources available to businesses and employees. The U.S. Substance Abuse and Mental Health Services Administration provides virtual recovery resources, while the U.S. Surgeon General’s framework for workplace mental health offers actionable guidelines to improve mental well-being in the workplace. Beyond government resources, partnering with mental health organizations or consulting with benefits brokers can help you enhance your offerings. At Simco, we support businesses with expert advisory services to help design employee benefits packages that prioritize mental health support, ensuring that employees have access to the right care at the right time. Support Remote Employees by Encouraging Time Outside the Home Remote work can offer flexibility, but it can also lead to feelings of isolation, especially for employees who lack social interaction with coworkers and spend long hours in the same environment. One way to combat this is by encouraging employees to occasionally work outside of their homes, whether at a local café, co-working space, or a public library. Changing the scenery not only helps break up the monotony but also allows employees to interact with different environments, which can boost creativity and reduce feelings of isolation. Employers can even offer stipends or reimbursements for working in co-working spaces or coffee shops to help facilitate this. It’s important to remind remote employees that stepping outside the confines of home can be a helpful way to recharge, meet new people, and foster a sense of connection with the world beyond their screens. This small change can make a significant difference in mental health, improving both mood and productivity. Key Takeaways Investing in mental health benefits doesn’t just support your team. It also enhances productivity and creates a positive, inclusive company culture. Taking steps to support mental health in the workplace shows your employees that they are valued and cared for, leading to a happier and healthier workforce. When mental health is integrated into your workplace strategy—not as an afterthought, but as a core focus—you create the conditions for long-term success, fueled by healthier, more focused, and more fulfilled employees.
April 23, 2025
Hiring interns—especially during the summer—can offer tremendous value to both the student and the employer. It provides an opportunity for students to gain valuable work experience while helping businesses bring in fresh perspectives and support on key projects. However, in addition to designing meaningful experiences, organizations must also navigate important legal and practical considerations, particularly around compensation. Should Interns Be Paid? While some internships are unpaid, it’s widely recommended—especially by career services professionals—that students receive at least minimum wage. Interns often contribute significantly to workplace operations and may perform tasks similar to those of regular employees. The Fair Labor Standards Act (FLSA) does not specifically define “intern” or provide a blanket exemption for them. That said, most HR and legal experts agree that, unless specific criteria are met, interns should typically be treated as employees and paid accordingly. There are exceptions, such as individuals volunteering for public sector or nonprofit organizations with no expectation of compensation. The DOL’s “Primary Beneficiary” Test To determine whether an intern must be paid, the Department of Labor (DOL) uses a flexible, seven-part test that assesses who primarily benefits from the arrangement—the employer or the intern. No single factor outweighs the others, but the overall context matters. For instance, if the intern is replacing paid staff or if the company directly benefits from their work, it may trigger employee classification. Here are the factors: Both parties understand there’s no expectation of pay. The experience includes training similar to that found in an educational environment. The internship aligns with formal academic programs or offers academic credit. The internship schedule accommodates academic calendars. The experience offers significant educational value over time. The intern’s tasks complement, rather than displace, paid employees. There’s no expectation of a paid job after the internship ends. When in Doubt—Pay If your organization stands to benefit more than the student, it’s safest to classify the intern as an employee. Doing so reduces risk and aligns with legal expectations at both federal and local levels. Remember: even if a program meets federal guidelines, stricter state laws may apply. Wage Requirements for Interns in New York State New York State’s Minimum Wage Act and Wage Orders contain specific rules for pay and overtime. These rules apply in addition to those required by federal law, including the Fair Labor Standards Act. Here are some important considerations for employers in New York State: Paid Internships: Generally, interns must be paid at least the state minimum wage. However, unpaid internships may be acceptable if they meet specific criteria, such as being part of an educational program overseen by an accredited institution that awards academic credit. Exemption from Minimum Wage: An intern may be exempt from minimum wage and overtime requirements if they meet specific criteria set by both the U.S. Department of Labor and the New York State Department of Labor. This includes criteria like the internship being similar to an educational program, benefiting the intern, not displacing regular employees, and having no expectation of a paid job after the internship ends. Paid and Unpaid Internship Clarification: There is no prohibition on an intern receiving academic credit while also being paid, as long as the employer adheres to minimum wage and overtime laws. The training should provide significant educational value, not just be for the employer’s benefit. Nonprofit Organizations and Interns: Not-for-profit organizations may have unpaid interns if they meet all criteria to not be considered in an employment relationship. Compensation and Classification Assuming your interns qualify as employees, they will almost always be classified as nonexempt under the FLSA, meaning they’re entitled to minimum wage and overtime pay. Rates should comply with whichever is highest: federal, state, or local minimum wage. Intern pay often varies by education level and field. According to the National Association of Colleges and Employers (NACE) , the average hourly rate for bachelor’s-level interns has increased annually and is now $23.04 in 2025. High school interns are typically paid minimum wage. Health Benefits for Interns Some employers choose to offer benefits, even though it’s not always required. Larger employers subject to the Affordable Care Act (ACA) may need to provide health insurance to interns classified as seasonal workers, depending on hours and duration of employment. If you’re considering extending benefits, it’s important to consult with your broker and review your benefit plan documents to confirm intern eligibility. Offering health benefits can enhance your organization's image among job seekers and college placement offices, but it also comes with administrative responsibilities—such as managing enrollment and COBRA communications. Best Practices for a Successful Internship Program Before the Internship Begins: Create a clear intern policy outlining job duties, compensation, benefits (if any), and at-will employment status. Assign supervisory roles and evaluation responsibilities to ensure guidance and support. When applicable, obtain documentation from schools confirming the educational value of the internship. Confirm whether your business or the educational institution has insurance that covers interns. Once the Intern Is Onboarded: Provide orientation that includes your company’s mission, policies, and workflows. Clearly explain pay schedules and applicable benefits. Review child labor laws if hiring minors. Be mindful of hour and duty restrictions for younger workers. Always check your state’s specific labor laws and requirements, such as work permits for minors. Final Thoughts Whether paid or unpaid, interns should be treated with the same care and oversight as regular employees. This includes timekeeping for pay accuracy, applying company policies uniformly, and ensuring workplace protections are in place. Interns may still have the right to file claims under federal or state law—even if unpaid—if workplace violations occur. A well-planned internship program not only benefits the student’s development but can also provide your business with fresh perspectives and assistance on key projects. Being proactive and compliant helps create a successful experience for all involved.
April 15, 2025
It’s April 15—Tax Day in the U.S.—and if you’re a business owner or HR professional, chances are W-2s, filings, and compliance have been front and center for weeks (if not months). But here’s the thing: tax season doesn’t have to be stressful. The right payroll and HCM technology can turn what’s traditionally a time-consuming, error-prone scramble into a streamlined, accurate, and surprisingly painless process. From automatically balancing year-to-date totals to generating and distributing W-2s on time, a robust payroll system ensures nothing slips through the cracks. No more cross-checking data across platforms, no more last-minute tax filings, and no more anxiety about penalties or missed deadlines. At Simco, we get it—because we help businesses simplify this process every single day. The Challenges of Traditional Payroll Tax Management If you're still managing payroll taxes manually—or using disconnected software systems—it’s all too easy to fall behind. Some common issues employers face include: Human error : Tax calculations, forms, and deadlines are complex. A small mistake can lead to penalties or costly overpayments. Time-consuming manual work : Without automation, payroll processing can involve endless imports, exports, and reconciling data across multiple platforms. Compliance risk : With ever-changing tax laws at the federal, state, and local levels, staying compliant can become overwhelming without the right tools. How the Right Technology Can Make Tax Season a Breeze Today’s modern payroll and HCM systems are designed to simplify these challenges. Here’s how the right technology can help: 1. Automated Tax Filing and Payments: An integrated payroll system automates tax calculations, deductions, and filings. Forms like W-2s and W-3s are automatically generated, filed, and paid—without manual input. This reduces the risk of late filings, penalties, and missed deadlines, ensuring compliance with the IRS and state tax agencies. 2. Streamlined W-2 Management: W-2s can be a headache to manage—especially if you have complex tax scenarios like multi-state employment. With an automated system, W-2s are generated and distributed electronically, ensuring accuracy even in complex situations. Employees receive the correct form without you having to spend valuable time cross-checking or manually making corrections. 3. Self-Balancing Capabilities: A self-balancing payroll system ensures that your year-to-date totals and tax filings are accurate, eliminating the need for extensive manual reconciliation. By automatically matching figures in real-time, it streamlines year-end reporting, providing peace of mind when the filing deadline approaches. 4. Fewer Third-Party Imports and Exports: With everything integrated into a single platform, you won’t need to rely on third-party software or services for tax filing and reporting. This means fewer opportunities for errors, fewer manual imports and exports, and significant time saved during payroll processing. 5. Automated Adjustments and Updates: Tax laws and rates change frequently. With the right payroll system, you won’t have to worry about manually updating deductions or tax rates. The system automatically applies changes—whether it’s an update to federal tax rates or state-specific deductions—so your payroll is always up to date. 6. Expert Support When You Need It: Even with the best technology, tax season can present complex challenges. That’s why it’s important to have access to expert support. Whether you need help with multi-jurisdiction filings, audit preparation, or just have questions about tax return procedures, our team of HCM Specialists at Simco is here to provide guidance and ensure that you’re compliant every step of the way. Why Choose Simco for Smarter Payroll and Tax Management? As an isolved Network Partner, we offer a fully integrated payroll and tax management system that is built to handle the complexities of tax season—and beyond. We provide businesses with the tools they need to automate tax filings, ensure compliance, and streamline payroll processing. Here's how we do it: All-in-One Payroll & Tax Platform : From payroll processing to tax deposits and W-2 filings, everything happens within one system, reducing manual work and the risk of errors. Automatic Filing & Timely Accuracy : Federal, state, and local tax filings are completed automatically and on time, ensuring your employees receive only one accurate W-2 form—even in multi-state tax scenarios. Error-Free Tax Reporting : Our self-balancing ledger helps reduce errors and simplifies reconciliation, making tax reporting easier and faster. Expert Support : Whether it’s navigating multi-jurisdictional filings, preparing for an audit, or handling amendments, our team is always available to offer expert advice and assistance. Cost-Effective Solutions : We offer top-tier tech at competitive pricing, often matching or beating our competitors (learn about the Simco Price Match Commitment here !), while providing the personalized service that large providers can’t. Let’s Make Next Tax Season Easier, Starting Today It’s never too early to think about next year. With our unified payroll/HCM solution at Simco, you can save time, reduce stress, and ensure compliance all year long. It’s time to upgrade your payroll system to one that works smarter, not harder. Let’s chat and explore how we can help streamline your payroll and tax processes, so you can focus on growing your business with confidence.

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