PTO vs. Sick Leave
- Veetahl Eilat Raichel
- May 30, 2022
- 6 min read
Updated: Nov 10, 2023
It's no secret that employees need — and deserve — paid time off.
Sick days. PTO.
They’re the same, right? Wrong.
If you have questions about the differences between PTO vs. sick time, we have the answers.
Our in-depth review will clear up the confusion about sick leave vs. PTO meaning, including the advantages of one type of policy over the other.
Table of Contents
Sick Leave vs. PTO: Is There a Difference?
Yes. There is a huge difference!
Although they are frequently lumped together, paid time off and sick days are not the same things.
Sick leave is exactly what it sounds like — time off when you’re sick. Typically, the employee is required to submit a doctor's note to prove they were ill or taking care of an ill family member.
Paid time off, on the other hand, can be used in any way the employee desires. They may:
Take a vacation
Stay home because they don’t feel well; or simply
Take a “mental health day”
At Sorbet, we’re huge fans of PTO. We believe that paid time off should be all about empowering employees to take meaningful time off, so they can:
De-stress
Recharge physically and emotionally
Avoid burnout
Improve their work performance
Sorbet turns PTO from a lose-lose into a win-win by:
Suggesting pre-approved dates for employees to take PTO without disrupting workflows
Giving employees the ability to instantly exchange their unused PTO for cash, so it doesn’t go to waste
Saving employers' money by reducing their annual accrued liabilities and burnout costs
Want to know more? Click here to schedule a free demo today.
What Is Sick Leave?
Sick leave, commonly referred to as sick days, is paid time off employees receive when they need to miss work due to health-related circumstances.
What counts as sick time?
Employer guidelines and state laws will vary, but qualifying reasons for sick pay often include:
Physical illness
Injury
Care of treatment of a mental illness
The need to care for a family member who is ill or injured
Preventative medical care
Disability; or
Medical diagnosis
Are Employers Required to Offer Sick Leave?
Maybe. Whether an employer is required to offer sick leave depends on state and municipality guidelines.
At this time, the following states require employers to provide paid sick leave to their employees:
Arizona
California
Colorado
Connecticut
Delaware
Maine
Maryland
Massachusetts
Michigan
New Jersey
New Mexico
New York
Washington
Oregon
Rhode Island
Vermont; and
Washington
Additionally, some cities and jurisdictions mandate that employers provide paid sick leave to employees.
What Is PTO?
Paid time off, or PTO for short, refers to the time an employee gets to take off from work — and still get paid.
PTO can include things like:
Vacations
Personal days
Mental health days; or
Illness
There are several PTO options that employers may offer.
For example, you may have:
Unlimited PTO: This is when the company lets employees take free time whenever they need to, as long as it doesn't interfere with their ability to complete their jobs.
Accrued PTO: This is when employees can earn or accumulate days off over time. For instance, maybe you earn two hours of PTO for every 40 hours you work. Plans for PTO accrual will vary from company to company.
PTO Bank: This is when the company gives its employees a set amount of hours for paid time off, which reset annually. The PTO reset may be by hire date or January 1 of the new year.
Are Employers Required to Offer PTO?
Generally, no.
There are no federal, state, or local laws that require employers to provide employees with paid vacation time.
However, some jurisdictions have decided to enact laws requiring employers to offer paid leave that employees can use for any purpose they choose, including vacation.
Take Maine, for example. They require employers with over ten employees to give paid time off that can be used for any reason. And Nevada has implemented a similar law that applies to employers with 50+ employees.
Are Sick Days Considered PTO?
Let’s take a look at sick leave vs. PTO.
Picture the term PTO as an umbrella covering any possible reason an employee may need (or want) to take time off work and still earn partial or full pay.
Under that umbrella are the facets of paid time off types, one of which is paid sick time. (In case you’re wondering, the others are vacation time and personal time).
So, while PTO definitely isn’t sick time, sick time ‘technically’ counts as PTO.
4 Advantages of PTO vs. Sick Time: Employer Perspective
#1: A Single PTO Policy Can Cover Multiple Jurisdiction Requirements
This is important for companies that have locations in multiple states and/or jurisdictions.
Since the requirements for paid sick leave can vary so much between states or jurisdictions, a PTO policy may be the easiest option for keeping a company's employees on the same plan — without having to juggle the requirements in different jurisdictions.
#2: PTO Policies Can Ease Administrative Burdens
Another great advantage of offering PTO vs. sick time is that paid time off can ease the administrative burden.
When a company simply offers paid time off, their human resources team doesn’t have to track whether an employee took time off for illness, personal reasons, or vacation. Plus, there is no doctor’s note or proof of illness required.
Plus, offering PTO versus sick time goes a long way towards employee retention, so companies can use the money they might have spent on hiring to focus on keeping their seasoned employees in the team.
#3: PTO Policies Can Help Employers Encourage a Healthy Work-Life Balance
It seems like more people than ever are striving to find a healthy work-life balance.
But many employees, especially those working hourly jobs, often place a higher value on the
dollar amount of their paycheck than they do on taking much-needed time off to recharge.
Offering a PTO policy can help!
By allowing your employees to take paid time off, as opposed to just sick days, you will be:
Helping them reduce stress
Lowering their chances of getting sick
Creating a happier workforce
Improving their mental health
Increasing their productivity when they are at work
Letting them know that you value them and their families
And those are powerful win-wins for any employer.
#4: With a PTO Plan, There’s Often a Stronger Focus on Performance Rather Than Attendance
Believe it or not, taking time off work helps companies lower their concerns about employee attendance while improving employee performance.
Namely, a leading HR platform for midsized companies, analyzed the data from over 125,000 employees.
Their findings revealed that employees considered to be “high performers” took around 19 days of paid time off each year.
When employees feel valued, their productivity and loyalty increases. A PTO plan helps to ensure just that.
4 Advantages of PTO vs. Sick Time: Employee Perspective
#1: With PTO Policies, Employees Have More Flexibility
As we are looking at PTO vs. sick time, an important factor to consider is the amount of flexibility each of them provides the employees.
The options provided with a paid time off policy make it the hands-down winner.
A paid time off policy gives employees the ability to decide what’s important in their lives and to be there for life’s most special moments, such as:
Holidays
Family vacations
School graduations
The birth of a child or grandchild
Saying their final goodbye to a friend or loved one
Hourly employees can fully enjoy their time off without having to fret over not having a paycheck to come back to when they return to work.
#2: PTO Policies Provide an Added Benefit for Employees Who Don’t Get Sick Often
What about the employees who hardly ever get sick?
If they are accruing time off under two different categories, PTO and sick time, but never need to use their sick days, they’re missing out on the advantage of the time off that accrues as sick leave.
By choosing a PTO policy over a sick time policy, all the time-off accruals are in one place — creating a system that’s much fairer for healthy individuals.
Additionally, it's crucial to consider the impact of inflation on PTO to ensure the benefits remain meaningful and relevant.
#3: Under PTO Plans, Employees May Feel Empowered Rather Than ‘Policed’
Let's face it, having to take a note to your boss after a sick day can feel like a super awkward invasion of privacy.
Choosing to operate under a PTO policy will give your employees a sense of empowerment — instead of feeling like they’re in the school principal's office.
#4: Unlike Sick Time, Unused PTO Is Often Paid Out When Leaving a Company
What happens to an employee’s accrued PTO when they leave a job?
In contrast to sick time, they may be entitled to a PTO payout. However, it's important to be aware of the policy regarding employer revoking accrued PTO as it can vary and might impact the payout when leaving a job.
The following states have statutes that require companies to pay out an employee’s unused PTO when the employment relationship comes to an end:
Alaska
Arizona
California
District of Columbia
Illinois
Indiana
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Minnesota
Nebraska
New Hampshire
New York
North Carolina
North Dakota
Ohio
Oklahoma
Pennsylvania
Rhode Island (with a minimum of 12 months of employment)
Tennessee
West Virginia; and
Wyoming
Save On Your PTO Costs With Sorbet
Unused PTO can cost employers thousands of dollars.
It can also result in tired, burnt-out employees who aren't performing to their full potential.
If you’re interested in saving expense and liability costs for your company while simultaneously improving the work-life balance of your employees — Sorbet is for you.
We’re the sweet solution to PTO. Click here to schedule your free Sorbet demo.
