Keeping track of time-off policies and managing employee time-off can be difficult, confusing, and time consuming. Eddy simplifies this process by allowing you to create custom policies that accrue how and when you want. Eddy also allows you to create stipulations to every policy, such as setting a max balance, designating an approver, and more!
Creating a Time-Off Policy Explainer Video
Who Can Create a Policy
Policy creation is limited to employees who have HR Admins permissions. This includes Owners, Super Admins, and HR Admins. These employees will see the “Time Off” tab in their global navigation and will also see the “Policies” sub-tab when they click into the “Time Off” tab.
What Kind of Policies Can I Create?
Within Eddy, you can clearly define your PTO policies for your employees. We allow you to create policies in two different categories: Vacation, and Sick.
Creating a Vacation policy will set clear rules and expectations about how much vacation time an employee can take each year.
Creating a Sick policy is a great decision if your company allows for paid sick days. This will help your employees understand how often they’re allowed to take time off when they’re not feeling well.
It’s not necessary or required to create a policy in both categories. For example, if you’re a company that has “Unlimited PTO” and you do not discriminate between Vacation, Sick, or any other type of time off, you might just make a single policy under the Vacation category and name it “Unlimited PTO.”
However, if you do have specific policies for Vacation and Sick days, Eddy makes it easy to both create those policies and add employees to them.
How To Create a Policy
Creating a policy is simple and straightforward. You can start by clicking on the “Add policy” card that is located under the Vacation or Sick category.
When creating a PTO policy, whether in the Vacation or Sick category, one of the first decisions you’ll make is whether or not the policy you create has a limited or unlimited accrual method. In the sections below, we’ll explain both types of policies so you can decide which is best for your company.
Creating an “Unlimited” PTO Policy
Once you’ve clicked the link to add a policy, you’ll see a simple form that will walk you through the steps of policy creation. The first item on the form is giving your policy a name. We recommend creating a clear, easy-to-understand policy name that you won’t be afraid to share, as it will be made public to employees.
After naming your policy, your next decision is to determine the accrual type. In this section, we’ll focus on selecting “Unlimited” accrual. If you choose to allow for unlimited accrual, employees will not carry a time-off balance. They will simply be able to request time-off without the constraints of making those requests against an existing balance.
Selecting the “Unlimited” option makes policy creation simple. Once you’ve determined that you will allow for unlimited accrual, there is only one step left to complete the creation of your policy.
The final step in this scenario is to choose an employee to receive an email notification for every time-off request that is made in relation to this policy. Here, you have two options. You can choose that the manager of the employee making the request should get the notification and be able to make the decision on approving or denying the time-off request, or you can designate a single company administrator to receive all requests for this policy.
After making your decision on which employee will receive the approval notification, you just hit the “Save Policy” button at the bottom of the page, and you are done!
Creating a “Limited Accrual” PTO policy
If you decide to put a limit on the amount of time your employees can accrue, we add a few extra steps to the creation of the policy just to be sure it’s exactly how you want.
The first step is to select the option "Yes, they accrue hours"
Once you’ve created a name for your policy and you’ve determined that it’ll be a limited accrual policy, you’ll notice that a few extra fields drop into the form.
These fields will help set rules around how much time an employee accrues and how often they accrue it. These fields will also help you to define limits on carry-over and max-balances, and even help you create employment milestones.
Yearly Policy Cycle
The first decision you'll need to make is when you want your yearly policy cycle to start. Most companies choose to start their cycle on Januar 1st, but we understand that some companies (depending on the industry and the fiscal calendar) need the flexibility to start their policy cycle at a different date.
With Eddy, can choose between multiple accrual rates. We accommodate businesses whose employees accrue time-off based on hours worked, as well as businesses that accrue time-off based on passage of time (i.e. employees accrue 2 hours of PTO every other week).
Additionally, we accommodate businesses that do "lump sum" accruals where all the PTO hours are given at the beginning of the cycle period. So if you want to give your employees 80 hours of PTO for the year on January 1st, you can do that too.
Simply select your accrual frequency from the dropdown menu, and then input any additional information about your accrual method as needed.
The next decision you’ll make is whether or not you want to create employment milestones for the PTO policy. Milestones are a way to reward employees who have worked for longer periods of time at the company.
Milestones are optional and you do not need to include them in your policy. However, if you do choose to allow employees to accrue time at a faster rate when they hit employment milestones, Eddy makes this easy to implement.
Start by selecting an employment milestone from the dropdown. Choose the work-anniversary that an employee will start to accrue time at a faster rate than the base rate of accrual that you initially created. Then input a number into the “Hours earned” field for employees who reach that particular milestone.
Wait Period for New Hires
After you’ve made a decision on milestones, your next step will be to determine if you’d like to create a waiting period for new employees before they can begin to accrue PTO.
A waiting period is often used so that companies can evaluate new employees in their new job before offering them the option to take paid leave.
If you’d like to implement a waiting period, simply click the “Yes” option, and a new field will drop into the form where you’ll input the number of days you’d like a new hire to wait before they begin to accrue time-off. (In the example below, we’ve specified a waiting period of 30 days before a new hire can begin to earn PTO).
The next decision you’ll make on the form is whether or not you’d like to implement a carry-over limitation. Throughout the year, and over the course of many years, employees may build up a large balance of PTO because they choose not to use the hours they have earned. If you choose not to implement a carry-over limit, the entirety of an employee’s time-off balance will be carried over from one year to the next.
You may choose to specify a carry-over limit in order to encourage employees to use the time-off they’ve accrued. By specifying a carry-over limit, employees will be incentivized to take paid leave throughout the year rather than saving it and carrying it over to the next year.
To do this, click the “Yes” option and then type a number into the “Max carry over” field. (In the example below, we’ve specified a carry-over limit of 100 hours).
Your final decision is to define a max balance. This is an optional field and is not required.
A max balance is simply putting a ceiling on the amount of hours an employee is able to accrue. A max balance should be high enough that it does not significantly infringe on an employee’s ability to take a well-deserved vacation.
When an employee reaches the max balance you’ve defined, the employee will stop accruing PTO until their balance drops below the defined maximum.
To set a max balance, simply enter a number into the max balance field. The number you enter into the max balance field must be greater than the one you enter into the max carry-over field. (In the example below, we’ve defined a max balance of 200 hours).
Saving the Policy
Once you have completed your policy creation form all you need to do is click “Save Policy” at the bottom of the screen.
Congratulations, you’ve now got a PTO policy created in Eddy!