What is PTO?
PTO stands for paid time off and under the National Employment Standards, and it can refer to several types of paid leave. Most employees receive leave entitlements, with casual employees the exception. Casual employees are paid a loading on their base rate to compensate them for such things as the absence of leave entitlements.
Types of paid leave for employees
Paid leave can refer to annual leave or long service leave, through which employees take time away from work to do as they wish, whether that is taking a holiday or staying at home and attending to life admin.
Paid time off also includes sick and carer’s leave, which employees can only access when they are ill or caring for someone who is ill; parental leave, which is to be used when a child is born or adopted; and bereavement and compassionate leave, provided when an employee’s family member is seriously ill or dies.
These are the most common types of paid leave that employers will provide. However, employees may also request other types of PTO, as outlined by the Fair Work Ombudsman. As the name suggests, employers continue to pay their employees during their time taken away from work.
Generally, during paid leave, employees are paid their base pay rate, excluding overtime rates, allowances and bonuses, even if the employee works these hours and receives these allowances in a standard working week.
How can employers support employees when taking paid leave?
Employers can better prepare for the disruption that a team member’s absence may cause to their business by putting policies and procedures in place that facilitate employees’ access to paid leave. These may apply before employees take leave, during the paid leave, and on returning to work after leave.
Before taking leave
If you implement the following measures in your workplace, you may avoid problems and confusion occurring while an employee is on leave.
Encourage employees to book leave early
For some types of leave, such as sick and carer’s leave and bereavement leave, an employee may not be able to provide notice of their absence before the workday begins. Usually, this type of leave requires a short amount of paid time off, such as a day or two, and their absence does not significantly disrupt the business.
However, annual leave and long service leave most commonly involve an employee being away from work for at least a week – and possibly several weeks or months, depending on the amount of leave time accrued and the employee’s plans. For example, some employees will save their entitlements from one year to the next, then take six to eight weeks of paid time off to travel overseas. In these circumstances, employees can usually provide notice of their time away.
It can help employers and employees alike to make an annual request for employees to book their annual leave. For example, the start of the calendar or financial year may be a good time to call for employees to book their intended leave dates for the year ahead. This helps employers plan to overcome workforce deficits and ensure enough staff are still available at work during key periods, and also ensures staff are taking their entitlements each year.
Ensuring employees book their leave in advance also helps them to plan their own needs. For example, many parents book annual leave during school holiday periods so that they can enjoy the time off with their family. However, depending on the size of your workforce, it may not be possible for so many workers to take this time off at once. Early booking of annual leave means those whose application is denied because other employees applied for the time off first have time to make other care arrangements.
Organise out-of-office plans
Consider establishing a pre-leave checklist of tasks for employees to complete that will help the business operate smoothly while they are away from work.
At a minimum, the employee may be required to set an out-of-office (OOO) email, advising colleagues and external parties of their absence. The sender will then be informed to take other measures or will understand they need to wait until the employee’s return for their matter to be dealt with. Providing a template for employees to follow may be useful, as it may ensure they provide all important details such as their date of return and details of whom to contact during their absence.
If another worker will be overseeing the employee’s duties during their absence, determine who that person will be and ensure a handover is completed before the employee goes on leave. The handover may include information about where important files are located or the processes to follow for a task to be completed correctly.
Employees of non-small business employers (with 15 or more staff) have the right to disconnect from work, and this right will be extended to employees of small businesses from 26 August 2025. Therefore, an employee may refuse to monitor or respond to contact from their employer outside their working hours, including when they take leave.
So, it is best that you ensure you have all the information you require from your employee before they start their time off to avoid having to try to contact them while they are away.
During the leave
Many employees can struggle to disconnect from work during their time away, so consider how you can help them achieve this.
Encourage employees to avoid work devices
It may be helpful to show employees how they can turn off email notifications on their mobile devices to prevent them from being alerted while they are off. Or, if your employee has a mobile phone or laptop that you have issued to them for work use, encourage them to leave it at the office during their time off so they are not tempted to answer calls or check emails.
Avoid contacting the employee
While emergencies do occur and employees often do not mind helping out in these instances, often there is an alternate way of dealing with a problem than contacting the employee who is on leave.
If you completed a thorough handover before the employee began their leave, it is likely there is no need to contact them during their time off. However, if an oversight did occur, consider other ways to find the information you need. Act as if the employee is not contactable and exhaust other options before trying to contact them.
If contact during their time off is necessary, consider the method that you will use to contact them. A phone call may resolve the situation swiftly, but it may catch the employee off-guard or interrupt them at a delicate moment. A text message may be most tactful, enabling the employee to attend to the matter when it suits them and with an appropriate frame of mind. Also, try not to bombard them with messages or calls if they do not respond immediately, as it may appear that you are harassing them.
Avoid using email to contact employees while they are on leave. If you have encouraged employees to turn off their notifications, they will simply not be aware that you are trying to contact them. More importantly, however, employees may decide to quickly reply to other emails they feel may be urgent that they see in their inbox, and before they realise it, they have completed a significant amount of work.
On the return to work
There are several ways in which employers can smooth the transition from leave to work, especially if their employees have had a long break.
Take it easy
Try not to expect too much on the first day back or, when an employee has taken an extended break, perhaps the first week back. Some employees may like to hit the ground running while they are refreshed, and the time away may have sparked new ideas that they are excited to implement.
Other employees, meanwhile, will take time to get back into their work, especially if colleagues frequently ask them how their holiday went or want to pass on condolences personally after the death of a family member.
If you have a small team, and the employee is returning from a holiday, consider putting time aside for everyone to have a coffee or morning tea together early in the day. This may provide the opportunity for everyone to hear holiday stories at once, and then everyone can get on with their work.
Provide a list of priorities
It may help to give an employee some direction or focus when they come back to work after taking leave, particularly if they were not replaced during their time away. For example, outline the tasks that need to be completed on their first day back, as well as those that can wait until later in the week.
Employees often will have many emails to wade through on their return to work. So, if there is an important update or information that the employee should be aware of buried in their inbox, take the time to ask them to read it so they can catch up quickly.
Ask how you can provide support
After taking some types of leave, such as parental leave or extended sick leave, your employee may have different requirements or may want to request new working arrangements that better support them. For example, a parent returning to work after having children may find they want to request flexible working arrangements. For those returning after a long illness, they may need to work part-time while they regain their strength.
If you have not already discussed these issues, consider doing so in the days after they have returned to work. Even if this was discussed before their return, it is common for employees to think they can cope with their workload but then discover they cannot, so revisit the issue to check in and offer support.
Paid time off is an important entitlement for most employees that can temporarily disrupt business operations. However, by taking some key steps before, during and after an employee leave period, you can minimise the disruption and ensure they return to work refreshed, relaxed and ready to perform at a high level.
Frequently asked questions
How many weeks of paid leave do employees receive?
Under the National Employment Standards, full-time employees receive four weeks of annual leave, 10 days of sick and carer’s leave and two days of compassionate leave each time they meet the criteria. The amount of long service leave that is accrued and when employees can access it varies between states. Part-time employees receive a pro rata amount based on the number of hours they work each week. Some employers are required to provide more PTO under industry awards, while others have chosen to implement unlimited holiday leave policies.
When should employees use PTO?
Aside from parental leave, sick and carer’s leave and bereavement leave, when circumstances dictate its use, employees can use PTO at any time. There may be circumstances in which you can reject a leave application, such as having too many workers scheduled to be on leave at the same time. Employers may also be able to dictate when employees use annual leave, such as during a shutdown period over Christmas when the business temporarily closes.
Can employers force employees to take annual leave?
Employers can direct employees to take annual leave, as well as long service leave, when they have accumulated an excess amount of leave. The rules around this are outlined in industry awards and enterprise agreements.
It is best to discuss leave plans with employees before making a direction, as the employee may be saving their leave for a particular reason. For example, an employee may want to spend more than four weeks on holiday overseas, or they may want to take a semester off work to complete personal study.
