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Traditional Leave System and Paid Time Off

Company A has a PTO system in which employees are given 30 days of paid time off each year, which accumulates at the rate of 2.5 days a month. Under this policy, vacation and sick leave are all rolled into one paid leave and any absence whether scheduled, such as vacation, or unscheduled, such as sick leave, are taken from the accumulated leave the employee has earned.

Company B has a more traditional leave system in which employees are given 12 days of vacation, 10 days of sick leave, and 10 holidays. The company is closed on those holidays. Vacation is accumulated at a day per month. Sick leave has an unlimited accumulation, but unlike vacation would not be paid out upon termination of employment.

Since the employees of the merged company will be working side by side, the HR Director has asked you to review the situation and make recommendations for a solution.


As an HR Director prepare a report addressing the following issues:

Identify any additional information you would need to recommend a solution, and explain where you would likely find that information.
Discuss any issues you would likely encounter if you were to merge the PTO system to a traditional leave system. Explain which issues would be difficult to solve and why.
Explain any problems you see with leaving the two systems in place, and identify which system would be assigned for new employees.
Make a recommendation for one common PTO system. Explain your system and why you think this system is the best system for the company.

Include two to three scholarly references in your response.

Solution Preview

In accordance with BrainMass standards, this is not a hand in ready report but only background help.
Step 1
The additional information that I would need to recommend a solution is the leave requirements mentioned in the union agreement. If traditional leave is mentioned in the employment contract and company A is required to honor the contract then there can be no change in the leave until the duration of the employment contract is completed. Subsequent to the running out of the employment contract if there is a fresh union negotiation, the question of leave can be discussed and included in the new union agreement. This additional information will be available in the union agreement.

Step 2
If the PTO system were merged to a traditional leave system, the issues that I would likely to encounter are that the number of leave days would have to be increased from 30 to 32 days. Further, in a traditional system there are 10 holidays. The company would have to remain closed on 10 days of the year. Also, the human resource department would have to modify its monitoring system. It has to keep ...

Solution Summary

This solution explains the traditional leave system and paid time off. The sources used are also included in the solution.