Paid Time Off vs. Paid Sick and Vacation Leave: Which is Better for Your Practice?

By Kristina Schneider, Practice Success Coach

Add this to the list of items that law school doesn’t teach budding lawyers about when it comes to setting up their own practice.  What kind of benefits should you offer employees, particularly with respect to paid time off?

In recent years, many employers have moved more to a model of straight paid time off hours (otherwise known as “PTO”).  This would be a specific number of hours off per year given to employees, sometimes varied depending on full-time or part-time status and many times tiered depending on tenure at the firm.  One attorney coaching client of mine told me, “I prefer to give PTO, because I don’t really care about why they’re not in the office.  I once had an employee call out ‘sick’ and then I ran into him at a sporting event.  It was awkward and I did not like that he lied about why he was out.”

Having worked for estate planning attorney, Phil Kavesh, now for almost 19 years, I worked in an environment that differentiated between sick leave and vacation leave.  I had even once considered that PTO was better and wondered if it would be better for us at The Ultimate Estate Planner, Inc. to move toward a similar model.

What’s the Difference Between Sick Leave and Vacation Leave?

First and foremost, you may be wondering what the difference between sick and vacation leave is.  Sick leave is when you are not able to work and it is unplanned and not approved in advance.  Examples would be if you wake up and are not feeling well and call out “sick”, don’t feel well after lunch and need to leave early, or we even use it for times when you have something unexpected come up and you need to leave or extend your lunch to take care of something.  Basically, anything that is not requested and approved of at least 24 hours in advance.

Vacation leave is time out of the office, which is planned and approved in advance.  While labeled “vacation”, I can assure you that much of my vacation hours are used for non-vacationing type of events, such as doctor appointments, school/studying, or other personal matters.  But, regardless of why I am not going to be working, the hours are approved ahead of time and my absence is planned, known and scheduled in advance.

Know Your Legal Requirements

It is important to first know your legal requirements, which vary from state-to-state.  There are a handful of states that have requirements for paid sick leave, California is one of them.  Whether you choose to offer additional time off, differentiate it between PTO or separate sick and vacation time off, is typically up to the employer.

PTO or Sick/Vacation Time Off: Which One is Best?

I can understand the conundrum of my attorney client who was surprised to see his employee at the baseball game when he had out of work because he was “too sick”.  However, I can also attest to the number of attorney business owners who have small practices (anything less than 10 employees) and having an absenteeism issue in the firm, which I believe partly stems from the PTO designation.  Let me explain with this analogy.

Super Bowl weekend is this month, which for many is an opportunity to gather with friends and family for football, food, and fun.  It may result in a late night out, maybe too much to drink.  Employees begin to wake up on Monday, the 13th, to go to work and they just aren’t feeling up to it.  The extra few hours of sleep sound glorious.  The idea of going into the office and working doesn’t sound very appealing.  Perhaps they were so busy preparing for the Super Bowl festivities that they did not get a chance to take care of other errands and tasks they usually do on the weekend.  So, this employee decides she’s going to call in and use some of her PTO hours that day.

She has every right to do so, but when you have no differentiation between how people can use their time off, then they will use it freely as they want and/or need to.  And when you have a small business, the unexpected absence of even just one employee can have an impact on your firm’s productivity, efficiency, and depending on how big your firm is, potentially even your whole operation.  Now, imagine that your firm of 5 has 2 employees out.  What about 3 or 4?  You get the idea.

The result is that it leaves you, as the business owner trying to run a business, feeling very annoyed and upset with your staff, but they are within their full rights and abiding by your own firm’s rules and policies.

Where having a differentiation between sick and vacation hours and how they’re requested and can be used, you can help curb some of the unexpected and unnecessary absences.  Not always, but it helps.  For example, at our firm, we provide all full-time employees with 6 days (48 hours) of sick leave per year.  Any unused sick time is paid out as a benefit to each employee at the end of each year.  Our sick policy helps limit the unexpected absences, particularly where an employee is not legitimately too ill to work, but maybe just wants to catch a few more hours of sleep or wants an extra day off from a busy weekend.

One Final Recommendation

One final recommendation that I would also like to make is around how we view the concept of “sick”.  I think that some employers moved away from the concept of sick leave because of the issue around, “What is sick?”  We still call it “sick” leave here, but it’s really unplanned leave and there have been many times that I’ve used my sick time off to take a mental health day or because I simply was not in a mental space to be my best at the office.  “Sick” does not necessarily mean you have to be laid out in a hospital bed, unable to speak, move or do anything.

Whatever you decide to call it, I do think that by having some sort of system in place that helps discourage unscheduled and unplanned absences at the office is wise.  Conversely, it should also not be a policy that encourages a toxic practice either, like forcing sick workers to come in and work while not feeling well, either.  But, I do believe that by having some limitations for unplanned absence, you can better staff your business and avoid unnecessary interruptions, which will allow you to properly service your clients and keep your operations (and revenues) flowing!

Need Help Getting Firm Policies in Place?

Did you know that you can get our complete 63-page Ultimate Employee Handbook, which lays out these kinds of policies for the firm (and many more!), for a one-time licensing fee of $995?  It’s completely customizable and modifiable to you and your practice. Regardless of what kind of business you have, you should have some type of Employee Handbook which lays out all of these rules for working for your firm.  For a limited-time, we are extending a special $200 discount when you enter the promo code VACATION (all caps) during checkout. Expires on 2/24/2023.




Kristina Schneider is a Practice Success Coach here at The Ultimate Estate Planner, Inc.  She graduated with a Bachelor’s Degree in Business Administration from Pepperdine University in 2004 and was hired right out of college to work for the Law Firm of Kavesh, Minor & Otis, coordinating and facilitating Philip Kavesh’s “Missing Link” Boot Camps while also providing administrative support to Mr. Kavesh as his Executive Assistant for over seven years.  Through her direct hands-on experience in Mr. Kavesh’s law firm, Kristina has been able to assist numerous estate planning professionals through The Ultimate Estate Planner and, equally as important, many of their staff members, in the successful implementation of Ultimate Estate Planner’s products and systems. She is currently pursuing her MBA degree from Pepperdine University Grazadio Business School.  You can reach Kristina at (424) 247-9495 or by e-mail at

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