Voluntary Time-Off (VTO)

What is VTO (Voluntary Time Off)?

Voluntary time off (VTO) is the program where employees take time off from work without losing employment to balance work, personal, or family demands. Voluntary time off is offered by companies to their employees to take unpaid time off without losing their employment status. They are granted by a company to balance overstaffing and reduce staffing costs.

Many companies use voluntary time off programs as an alternative to reduce labor costs and protect against layoffs or downsizing.

Full-time employees can use VTO to reduce their fiscal year working hours without losing full-time employee county benefits. 

Types of VTO

1. Voluntary Time Off:

Voluntary time off is offered to an employee to take unpaid time off without losing their employment status. 

2. Volunteer Time Off:

Volunteer time off is a paid leave granted as a benefit to the employees to do community service or volunteer work.

How to create Voluntary Time Off (VTO) Policy 

Voluntary time off is generally offered to full-time employees. To create a VTO policy: 

1. Set an eligibility criterion

Decide if the voluntary time off policy can be used by only full-time employees or part-time as well. After this, if the company needs to set a minimum number of working days or hours after joining the company, this must be communicated with the employees. 

2. Establish an approval process

When the eligible employees opt for voluntary time off, it must be approved by the appropriate person. Sometimes, an organization can offer more VTO than required which can cause an imbalance in the workload and shifts. By having a relevant person approving VTO, the productivity hours can be effectively measured. 

3. Decide how many days of VTO is allowed

Since VTO is offered to improve productivity and reduce overstaffing costs, the company must make sure it’s granting the right number of days, keeping in mind the health and work of the employees. Some companies have a specific number of hours depending on the type of work. 

4. Choose how the VTO is going to be tracked

Business changes are unpredictable. It may have its requirements changed over a time period and will need extra employees to take on incoming work. To have a clear view on how many employees have taken voluntary time off, tracking the leave taken is important. Most growing organizations use a system to track theirs. 

Importance of Voluntary Time Off 

Voluntary time off not only helps employees take time off without losing their employment but also helps organizations to reduce costs and improve productivity. Some of its important points are listed below: 

1. Handle workload issues

Voluntary time off is given to employees when the company wants to cut down on the number of workers. To balance the extra number of workers, the company offers unpaid time off for a definite period. This way, the organization can balance workload and improve productivity. 

2. Reduce staffing costs

Overstaffing would lead to extra costs for the company. By offering unpaid time off, an organization can reduce its staffing costs.  

3. Balance work and life

The employees taking VTO (Voluntary time off) can keep their employment status. This way, they are eligible for the employee benefits and can take a break from their work routine. Ultimately, VTO is a good way for employees to balance their work and life. 

Drawbacks of Voluntary Time Off 

 Voluntary time off improves productivity and reduces costs for the organization. But when a company offers voluntary time off for a long period of time, employees may feel insecure about their employment status. Moreover, the policy should be such that employees must not feel compelled to take unpaid leave because of pressure from the administration. It should be completely voluntary from their side. To make sure that the workload is being distributed effectively and the employees get a clear view, designing the policy carefully while tracking the leave taken by the employees is crucial.  

 Frequently Asked Question (FAQs):

 1. What is the difference between paid time off and voluntary time off?

Paid time off, or PTO, is a type of leave offered to an employee to take time off from work while receiving their pay. It is calculated in hours, days, or weeks depending on the policy and the leaves pooled. Voluntary time off, or VTO, is a type of leave offered to the employees without pay to reduce overstaffing costs. However, the employees do not lose their employment status. 

2. What companies use VTO?

Voluntary time off is granted by private companies that value social responsibility. Companies large or small can fulfill their corporate social responsibility to make a positive change in the community. 

3. How to calculate VTO?

To calculate voluntary time off, the company should define the number of unpaid leave offered to the employees. The number of unpaid days taken by employees must be recorded periodically. Some companies manually update everything, but that process isn’t exactly practical. 

4. Can I automate the VTO process?

Yes, VTO (Voluntary time off) process can be automated. All you need is a system where you can set the policy and integrate it with your payroll. Start using Keka today to automate your VTO policy with payroll. Sign up here for a free trial

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