Hi, I’m Muhammad, a mechanical engineer, consultant, project manager and academic. I’ve spent the past decade working in consulting and construction. I’m passionate about developments in the construction industry, and eager to help businesses within the sector grow through smart time management practices. Let’s talk about PTO, and how it can be leveraged to boost productivity and improve performance in the US construction industry.
Overview
The US Construction Industry is tough. Imagine working on a construction site day-in day-out, doing the back breaking work involved in laying a couple of hundred miles of pipe. Imagine doing a concrete pour at an Arizona desert site; sure, you might start your shift at 3:00 AM to avoid the worst of the heat — but trust me, you don’t want to be anywhere near that slab come noon. Imagine doing 7-12’s for a month or two, because that new strip mall needs to open on time or there’ll be hell to pay…..
Everyone deserves a break from work. A few days or weeks to relax without any worries are bound to have employees feeling recharged and well rested. The only thing better than taking days off is getting paid for them.
This Article Covers:
- What is PTO?
- Why is PTO Important in the US Construction Industry?
- Is PTO a Legal Requirement in the US?
- What are the Different Types of PTO in the US Construction Industry?
- Do Construction Companies Benefit from PTO?
- How is PTO Calculated in the US Construction Industry?
- What is a PTO Policy?
- Should your US Construction Company have a PTO Policy?
- What is a PTO tracker?
- What are Some Features of a PTO Tracker?
- What are Some Benefits of Using a PTO Tracker?
- How do I Select the Best PTO Tracker for my US Construction Company?
- Final Thoughts
What is PTO?
Paid time off (PTO) is a work benefit where employees are paid while taking a break from work. That sounds great, and it is.
The number of PTO days an employee receives will vary from company to company. It may depend on the industry, an employee’s number of years of service, or position in a company. PTO forms part of company policy and is written into policy documents and employment contracts (be sure to scrutinize this section of your contract before signing on the dotted line!).
Everyone needs a break, construction workers included. With PTO, employees are paid not to work, and can spend their downtime as they see fit. Travel, pursue hobbies, spend time with family or friends, binge-watch all 757 episodes (and counting) of The Simpsons, ….. okay you might need to accrue considerable time off for that last one, but you get the idea.
Why is PTO Important in the US Construction Industry?
According to the US Department of Commerce, construction and contracting businesses have the highest failure rate of any other business. Up to 96% of these companies fail before reaching 10 years in business.
The work is there, unfortunately the workers are not. There is a growing demand for houses, hospitals, schools and roads; further spurred on by the US Government Bipartisan Infrastructure Deal. The well documented labor shortage in the US construction sector, particularly the scarcity of skilled labor, weighs heavily on the minds of small and large Contractors alike. Recent statistics indicate a shortfall in the region of 650 000 workers. This is worsened by the anticipated retirement of 40% of the current US construction workforce over the next decade.
Listen, working in US Construction is tough. Between challenging project schedules and tight deadlines; navigating labor and material shortages; dealing with difficult clients, bossy engineers (I should know, I’m one of them!) and subcontractors looking to cut corners; not to mention the strenuous and at times dangerous work involved, it can take its toll on the physical and mental health of employees, managers and construction company owners alike.
In context of the above challenges, one realizes that PTO is important for everyone involved. Employees get to take a break from work, reducing stress, and improving their mental and physical well-being. They can take care of personal or family matters without the additional worry of missing much needed income or losing their job. This leads to happy employees, who are less likely to join a rival firm or quit the construction industry altogether.
Is PTO a Legal Requirement in the US?
There are no US federal laws mandating that employers provide PTO. However, some US States require employers to provide PTO, in the form of paid sick days and paid family leave. Our articles on US Federal and US State labor legislation highlights the regulations applicable to the jurisdiction your company operates in.
Is sticking with legislative requirements good enough — I don’t think so.
The US legal requirements regarding PTO should be viewed as a bare minimum. If we look at the broader US construction industry and labor relations within the sector, offering PTO is an industry requirement. PTO is a sure-fire way to keep employees happy and motivated. It helps to attract and retain top talent, boost morale, and keep productivity high by reducing absenteeism and turnover. Employers in the construction industry should note that PTO is the 2nd most popular employee benefit in the US, behind only employer sponsored health benefits.
If your construction company doesn’t offer employees a good PTO package, they’ll be joining your competitors in no time.
What are the Different Types of PTO in the US Construction Industry?
Now that you know what PTO is and why it’s important in the US construction sector, let’s look at the types of PTO you’re likely to encounter while working in US construction:
- Vacation Days: This is a type of PTO that employees can take when they need a break from work. The name is misleading, employees can spend the time off as they’d like (you can’t force your employees to take a vacation!). The number of vacation days may differ across organizations. I’ve seen companies limit paid vacation leave to a few days a year. I’ve also seen other companies offer unlimited paid vacation time (I know, this sounds too good to be true).
- Personal Time: Everyone needs some time for personal tasks and errands, sometimes you can’t avoid scheduling a doctor’s appointment during work hours. That’s where personal time comes in; you get to spend time off at your discretion, without worrying about losing your vacation days. Personal time is (usually) separate from paid vacation, parental leave and sick leave.
- Sick Leave: Paid sick leave is provided to employees who are unwell, undergoing medical treatment or recovering from a medical procedure. Organizations may extend sick leave to family members. Mandatory paid sick leave is stipulated by some US States.
- Holidays: The US has 11 public holidays each year (12 public holidays every four years, due to the observance of Inauguration Day). In many organizations, public holidays are paid days off for employees to spend as they wish. Some organizations offer double pay for employees who work on public holidays. An organization may choose to offer its employees PTO on other significant days, such as birthdays, anniversaries or religious and cultural holidays.
- Parental Leave: While there is no federal law mandating parental leave, several US States have enacted paid family leave laws. Many companies offer paid parental leave to new parents. The length and scope of the paid time off varies by company. Some limit PTO to pregnant mothers before and after childbirth, others allow parents who welcome children through surrogacy or adoption to take paid time off as well.
- Bereavement Leave: Five states including California, Oregon, Illinois, Maryland, and Washington require employers to provide paid bereavement leave for employees. In general, most organizations allow for paid bereavement leave. The length of leave and relationship which qualify for paid bereavement leave differs between organizations.
- Voting and Jury Duty: Voting and jury duty are civic duties of all citizens. State legislation varies, with some states mandating PTO for both voting and jury duty. The amount of PTO offered will vary by organization, but it is generally in-line with the time required to discharge one’s duties.
Do Construction Companies Benefit from PTO?
PTO benefits construction companies just as much as it benefits employees. Here’s how:
- Reduces Employee Fatigue and Burnout: PTO is a great solution for managing employee fatigue and burnout. An employee time and attendance tracking system which is focused on construction activities and field crews, incorporates GPS, mobile tracking and time clock software, can help alert you when employees are not meeting their performance standards. Once you’ve noticed this drop in your employees’ performance, it’s time to discuss them taking paid time off. There will be a short-term hit to meeting construction milestones, however you will benefit immensely once employees return to work and their productivity skyrockets.
- Controls Absenteeism: Unplanned absences represent a major disruption to business operations, particularly for resource intensive and deadline driven work such as construction. Fortunately, with a good leave and PTO tracking software, requests for most types of PTO can be placed well in advance. Once you have approved requests for paid leave, you can use time and attendance and project management or construction management software to incorporate absences into work schedules, plan and redistribute work accordingly. Controlled absences are a great way of ensuring that construction activities run smoothly all year round. Trust me, you don’t want a bustling site turning into a ghost-town due to poorly managed employee absenteeism.
- Ensures Legal Compliance: Some types of PTO are mandated by law. Construction companies and contractors should be aware of such laws, to reduce the risk of non-compliance and potential legal action from unions or employees. Have a look at our articles on US Federal and US State labor legislation, to ensure that your construction company complies with the relevant regulations.
Now that you know a bit more about PTO in the construction industry, let’s take a look at how its calculated.
How is PTO Calculated in the US Construction Industry?
PTO calculations are challenging in the construction industry. At any given jobsite there could be full time workers, union workers, specialist subcontractors, tradesmen and seasonal workers. Each of these classifications could have different requirements and accumulate paid time off differently.
In the US construction sector, employees were traditionally offered separate PTO benefits which included paid vacation, parental leave, sick leave and personal time off. Recently, a shift has seen a move to a centralized PTO benefit that incorporates all forms of paid time off into a single PTO plan.
Here are some of the most common PTO models in US Construction.
Traditional Model – Set Amount of Days
In the US construction industry, PTO benefits typically begin after a 90 day probationary period. Once the probationary period is over, an employee has a specific number of PTO days that they can take whenever they wish.
The PTO is bound by policies that keep organizations staffed all year round. For instance, most companies limit the number of vacation days an employee can take at any one time. Others require employees to put in their requests for leave a stipulated number of days or weeks in advance, so that management can plan accordingly.
This kind of PTO is by far the easiest to calculate. All you need is accurate attendance records and timesheets. You can get these easily using free time and attendance software. Once an employee completes the probation period and becomes eligible for PTO, they can put in their request for PTO. You can track the number of paid leave days every employee takes easily using PTO tracking software.
Centralized PTO or PTO Bank Model
The centralized or bank system consolidates all types of paid leave into one pool. This is a great, simple way of letting your employees take charge of their leave. If you adopt the model, you will set aside a lump-sum number of days every year for employees to spend as they wish. Every time an employee takes an hour or day off, the time is withdrawn from their bank.
Tracking paid leave days under the bank model is a straightforward process. Plus, you get bonus points for allowing your employees the flexibility of deciding how they spend their leave days.
Unlimited PTO Model
The unlimited PTO model allows employees to take time off work whenever they wish, as long as their time away does not interfere with completing their work, meeting deadlines and work commitments. This model is one that employees love, however it has not seen widespread implementation in the US construction industry (yet?).
Company-Wide PTO
The idea behind this PTO model is that the entire company takes leave at the same time, meaning business operations are down for a few days. No one needs to apply for time off, which makes things a lot easier from an administrative perspective. Many US construction companies enforce this form of PTO during certain periods, for example during Christmas and New Year’s break, when people across the country are taking time off and business is slow.
Accrued time off
The accrued time off principle may be applied to either the traditional or centralized PTO models. Under this method, employees accrue paid time off with every hour, day or week they work. This is in contrast to a PTO lump sum handed out at the beginning of the year or cycle in question. For example, an accrued time off policy may state the following:
Between 1 and 5 years of service, employees earn a total of 100 hours of PTO time per year, earned at a rate of 1.92 hours for each full work week in a calendar year.
Accrued time off is relatively difficult to track and calculate manually. But don’t worry, I have the perfect solution for you. You can generate records of your employees’ hours easily with most time clock software. This way, you’ll know how much PTO every employee has accumulated even before they put in a request for paid leave days.
Rollover Allowance
Employees may exhaust their PTO during the year, however it is not unusual for employees to have a few days left over. Some companies have a ‘use it or lose it policy’. Under this policy, an employee forfeits all unused paid time off at the end of the year. Note that this policy is illegal in certain states.
Other companies carry over unused PTO to the following year, while some pay it out in addition to regular wages. Computing these rollover allowances is a breeze with time tracking software with timesheets and payroll features. These can be used together with a good PTO tracking software with additional features such as an automated leave request workflow.
We’ve talked a lot about PTO, much of the information we’ve discussed is captured in an organization’s PTO policy.
What is a PTO Policy?
A PTO policy is a guiding document which outlines a company’s paid employee benefits. It regulates how, when and how much time away from work employees can take while still getting paid.
PTO policies vary widely depending on the employer and industry. In the US construction industry, the average PTO for full-time employees was 8 days after a year’s service, and 14 days after 20 years’ service. Part-time employees and contractors may receive a pro-rated amount of PTO based on the number of hours they work.
Should your US Construction Company have a PTO Policy?
Absolutely. A PTO policy offers many benefits to both employer and employee. If you’d like to know more about creating a PTO policy for your company, we’ve got you covered. Read our articles How to Create a PTO Policy for a Construction Company and How to Create a PTO Policy for a US Company. Also make sure you check out our PTO policy guide.
If your organization already has a PTO Policy, well that’s great! The next step is making sure that your PTO policy is being implemented; unfortunately that’s easier said than done.
Managing PTO can be a time-consuming task for HR departments, particularly in large companies with many employees. Keeping track of each employee’s accrued PTO, approving or denying requests, and ensuring compliance with company policies and legal requirements can be a complex and challenging process. This is exacerbated in construction, as teams may be present on different sites, located across state or country lines.
In my opinion, the best way to manage PTO is through an effective PTO tracking system.
What is a PTO tracker?
A PTO tracker is software used to monitor employees’ paid time off. It helps employees and employers manage PTO requests and approvals. It provides real-time visibility into PTO balances and eliminates the need for manual processes. PTO tracking software streamlines and automates many of the tasks involved in managing PTO, making it simple to administer this employee benefit.
What are Some Features of a PTO Tracker?
A reliable PTO tracker is a helpful tool that streamlines the management of employee time off. Your PTO tracker should have the following features:
- Efficient Tracking: All types of time off, taken and remaining, must be tracked for every employee.
- Reporting and Analytics Capabilities: PTO trackers should have report on leave-related statistics, such as time off requests sorted by team or across the organization, leave balances per project, tracking PTO rollover amounts, to name a few.
- Integration: PTO tracker integration with time and attendance software, allows the PTO system access to employee clock-in and clock-out statuses, regular and overtime working hours, and more. This allows the PTO tracker to highlight any problems or irregularities.
- User-friendly Interface: A simple and easy to navigate interface may include calendars displaying employee availability, corporate holidays, vacation schedules and other significant events.
- Simplified Workflow: PTO trackers should enable simplified workflows for time off requests and approvals. Employees can submit their time off requests digitally and remotely, while supervisors and managers can effortlessly review and approve them within the system.
What are Some Benefits of Using a PTO Tracker?
Here are some of the key benefits of using PTO tracking software:
- Simplifies the PTO Process: With PTO tracking software, the entire process of applying, approving and managing PTO is reduced to a user-friendly interface, and involves nothing more than a few clicks. This is especially useful in construction, where paper forms are still used, and moved from various construction sites to offices for processing of leave and other HR requirements.
- Empowers Employees: Employees have real-time insight into their PTO balances and accruals. Employees can plan and manage their time off, fostering trust and transparency.
- Accuracy: PTO trackers ensure accurate and consistent management of PTO, as opposed to manual systems which may be prone to errors, discrepancy or manipulation.
- Easily Accessible: Modern PTO tracking software is cloud based, meaning it can be accessed wherever you are and whenever you’d like (provided you have an internet connection). This suits construction where there are remote projects, far-flung employees and managers who travel frequently.
- Prevents PTO Abuse: PTO tracking software helps prevent PTO abuse by ensuring that all requests are reviewed and approved in an appropriate and transparent manner.
- Improved Compliance: PTO tracking software ensures that PTO policies as implemented comply with state and federal regulations. This reduces the risk of non-compliance penalties and fines, which may be costly.
- Enhanced Employee Satisfaction: Employees value PTO as a benefit, and having a user-friendly PTO tracking system can enhance their overall job satisfaction. Employees are empowered to manage and plan their own time off, which may reduce stress and fatigue. This can lead to a happier and more productive workforce.
- Improved Company Morale: A PTO tracking system can also improve overall company morale. When employees feel that their time off is being managed fairly and accurately, they are more likely to feel valued and appreciated. This can lead to increased loyalty and engagement, and can help attract and retain top talent.
- Cost Savings: PTO tracking software can save employers costs by reducing the administrative burden of PTO management. Automating the PTO process removes the need for HR staff to spend time manually tracking PTO, saving time and resources. It also helps prevent costly compliance fines, penalties or extra expenses due to incorrect PTO amounts being calculated.
As discussed thus far, managing PTO effectively is crucial for your construction company. A reliable PTO tracker simplifies PTO management, improves productivity, and enhances employee satisfaction. The question then becomes ….
How do I Select the Best PTO Tracker for my US Construction Company?
When selecting a PTO tracker for your US Construction business, you should follow these steps:
- Review your PTO Policy: Familiarize yourself with your company’s PTO policy, as the PTO tracker you choose must comply with your PTO policy. A flexible and customisable software with the necessary integration features is required. This will help streamline your time management systems, ensuring that PTO is integrated and managed seamlessly.
- List your PTO Requirements: Make a list of organization specific requirements. Factors such as the number of employees, the size of your organization, integration with payroll, project management, site management and HR systems must all be considered. Prioritize features and functionalities aligned with your requirements, ensuring you find the perfect solution for our business. In construction, important features include mobile access, work offline modes and syncing capabilities.
- Conduct Research: Compare product features and customer reviews. Evaluate their website. Look out for user friendly interfaces, automated PTO accrual calculations, integration with your payroll software and other functional requirements you’ve listed. Investigate their reputation in the market; finding an impartial customer using the software and discussing it with them would be well worth your time.
- Use Trials and Demos: Many software providers offer free trials and demos. Use this to test the software, explore the features, navigate the user interface and evaluate how well it aligns with your PTO policies and requirements. Management and employees of various designations should test the software, allowing it to be assessed from different perspectives, enabling an informed choice that suits your business needs.
- Assess Customer Support: Assess the customer support offerings of each software provider. Items to check include the provision of training and onboarding resources; availability of support channels such as email, chat and phone; and how quick they are to respond and resolve issues. Good customer support helps to ensure that the PTO system is adopted without any technical difficulties or hiccups.
Final Thoughts
So, there you have it. PTO is a valuable tool which helps employers and employees navigate the challenges of the US Construction Industry. Besides being a respite for employees facing the physical demands and stress of construction work, PTO serves as an incentive for employers grappling with a persistent labor shortage. PTO benefits allow for a flexible approach in balancing work and personal demands. A well-crafted PTO policy, which goes beyond the bare minimums of legal compliance, supported by robust employee tracking systems suited to construction sites, also contributes to a healthier, satisfied, and ultimately more productive workforce. In a labor intensive industry where effective time management is paramount, embracing a well thought-out, comprehensive PTO strategy is instrumental in attracting, retaining, and maximizing the potential of your employees.
Take a look at the following articles for some additional reading:
Time tracking best practices for US construction companies
