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April 2020 > 3 tips for handling Paid Time Off (PTO)

3 tips for handling Paid Time Off (PTO)

3 tips for handling Paid Time Off (PTO)

The OnusOne system offers many benefits to employees who are willing to sign on to a shared-risk mentality, but the concept of paid time off is often difficult to understand. The low minimum guaranteed salary model is a fundamental tenet of the OnusOne system.  Under this model, if an employee does not generate any production for an entire week, he/she would be compensated at a base salary level only.   While it is true that employees whose compensation is managed through OnusOne are truly paid according to their professional contributions to the company, one could argue that they should be granted unlimited PTO. However, organizational goals are tied to workforce availability to meet the production needs of the organization, so it is recommended that you retain a structured PTO system with clear approval processes and limits on total available PTO.  

There are a number of ways to strategically approach the PTO concept, and it is very important to take the time to understand each and to select the strategy that you feel will have the greatest likelihood for success at your organization.  Below are the top 3 most popular approaches to handling PTO on the OnusOne system:

1:  Allow the system to automatically manage PTO.  Create pay profiles that guarantee roughly 40-60% of a full base pay levels,  and offer the ability to earn a higher gross annual pay when base pay is added to performance based pay.  Under this model, employees are likely to earn more total annual pay,  but total  pay drops to the base level only if no production occurs. As an example, an employee who takes a week of vacation would be paid base pay only.  If the employee takes 3 full weeks of vacation annually, compensation would drop by roughly 40-60% for 3 weeks of the year, but pay levels would likely remain increased for the remaining 49 weeks of the year.

2:  Offer 2 or more plans. Allow your employees to choose their relative level of risk tolerance.  Some employees may be willing to forgo higher earning potential throughout the year in return for higher guaranteed pay during vacation weeks. Others may prefer to take lower pay during holiday weeks if given the opportunity to earn more throughout most of the year.

3:  Offer “safe harbor” PTO plans.  Offer higher risk plans as long as employees are producing, and place employees on a “safe harbor” plan during vacation. Under this model, you can choose to offer a flat rate for any amount of PTO, or you can calculate a daily PTO compensation rate.

Note: OnusOne Account Executives are uniquely trained to help you select the best approach for handling PTO at your practice.

Posted: 10/27/2020


Jason Wambold

Jason is the co-founder and managing partner of OnusOne, by Pay-for-Performance Solutions LLC. OnusOne is a web based system that designs, installs, and administers shared-risk employee compensation models for fee-for-service industries. Jason has a proven track record of leadership success in the healthcare industry. He has over 20 years of experience building and strengthening clinical teams, and creating and developing effective leadership teams.

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