By Kara E. Shea

I recently received similar questions from two different clients who provide a generous amount of paid time off (PTO) that employees may use for any purpose. One client wanted to require employees to use at least five days of leave consecutively each year. The other told me it had eliminated the requirement but was now thinking about reinstating it. Their questions led to interesting discussions about the purposes behind “forced vacation” rules, and I thought it might be helpful to share what I learned with our readers.

Keep Employees Honest

First, in Tennessee, if you want to require employees to use a certain number of days of PTO consecutively, that is your right. Of course, some employees might not like being told when and how to use their PTO, so that’s a factor you should consider if you decide to implement such a policy.

In some industries (e.g., banking, financial management, and insurance), mandatory leave policies are used to prevent employee fraud and embezzlement. In fact, the FDIC recommends that federally insured financial institutions require key personnel to take two consecutive weeks of annual leave. The point being, negligence or intentional misconduct may be kept under wraps longer when no one else knows or sees what the employee is doing from day to day. When an employee is forced to take time away and her colleagues take over her duties, any issues are more likely to come to light.

One thing to keep in mind: If you’re implementing a forced leave policy to catch mistakes, fraud, or misconduct and you need the employee to be out of the office for a minimum amount of time, be clear that the consecutive days off must occur during regular workweeks when other employees are present. For instance, taking off Monday through Friday during the week of Thanksgiving wouldn’t count.

Head Off Burnout

Job burnout is a very real phenomenon. Studies show that allowing employees time away from work to rest and refresh themselves improves performance, productivity, and retention. But some of your “type A” employees will never take a true vacation unless you force them to do so.

A vacation doesn’t necessarily mean lounging in a hammock and sipping an umbrella drink. Your employees who would be bored with that kind of vacation may choose to engage in continuing education or volunteer work. Regardless of how they use their PTO, employees tend to have a fresh and more creative perspective on their jobs after they take their minds off work for a while, and that’s a good thing for employers.

Another benefit of requiring employees to take true vacations—no working from home, no checking in with the office—is that others in the organization must learn how to do the absent person’s job. If you unexpectedly lose an employee, whether it’s permanently because of a job change or temporarily because of illness or a family emergency, it certainly helps to have others who can step in to keep the balls in the air.

Remember that if an employee is taking leave under the Family and Medical Leave Act (FMLA), you cannot permanently replace her, and you must reinstate her to the same job when she returns from FMLA leave. So, you could look at mandatory annual vacations as “trial runs” for covering an employee’s job duties in situations where you may be legally required to do so.

Limit Leave Accumulation

Finally, some employees stockpile PTO and never use it. They may be workaholics, or they may be worrying-squirrel types who are saving their leave for an emergency that never comes. As a result, they may accrue hundreds of hours of PTO, which, depending on your state laws and your policy’s verbiage, may have a cash value that you must pay upon termination. Mandatory leave usage policies prevent banked leave from building up to a level that requires you to take out a loan to issue a departing employee’s final paycheck.

Bottom Line

For all the above reasons, you may want to think about adding a “forced vacation” aspect to your PTO policies. Leave laws vary from state to state, so be sure to check the applicable law in every jurisdiction where you have affected employees.

Kara E. Shea is an attorney with Butler Snow LLP in the firm’s Nashville, Tennessee, office where she is a member and Practice Group Leader for Labor and Employment. She regularly counsels clients in financial services, healthcare and home health industries on employment law compliance. She has extensive trial and appellate experience in Tennessee and around the country. She can be reached at kara.shea@butlersnow.com.