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Managing Time Off in Justworks Payroll
Admins with Company HR permissions can set up time off policies in their Justworks Payroll accounts so that their employees can request days off through the platform. Admins will be able to approve or deny time off requests, as well as view and manage employees’ time off balances.
To set up a PTO (Paid Time Off) policy, follow the steps below.
Adding a Time Off Policy
Start by clicking into the Time Off tab in the left-hand side menu of your Justworks Payroll account. Then, click the Policies tab, followed by the + Add policy button.
Screenshot showing the + Add policy button on the Policies page.
Basic Policy Details
On the set up page you’ll be able to enter these key policy details:
- Policy name: How the policy will appear in employees’ accounts.
- Policy start date: This can be the start of the current year — you will be able to provide our team a report of employees’ current PTO balances to ensure they’re starting with the correct amounts of time off.
- Policy end date: This field blank can be left blank if you’d like the policy to be ongoing.
- Policy type: Determines whether the policy is designated for vacation days, sick leave, or other.
- Timecard sync: Choose whether to sync employees' timecards with this PTO policy. Syncing will only occur when timecards are enabled, either now or in the future.
Screenshot showing the setup page where admins will need to enter the policy details.
Policy Structure
On the next page, you’ll get to determine the policy structure. This will include selecting the policy’s annual cycle and balance structure as well as optional policy add-ons.
Specifically, you’ll be able to choose from these options:
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Policy cycle
- Employee’s work anniversary: Policy will restart on an individual employee’s work anniversary.
- Calendar Year: Policy will restart on January 1st of each year.
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Balance structure
- Granted upfront: Employees receive their full PTO balance on the start date of their policy to use as they see fit throughout the year. With this structure, you can prorate the granted PTO for employees who join the policy after its start date.
- Accrual over time: Employees accrue PTO either annually or at a set rate as determined by the accrual method
- Unlimited/flexible: Employees have no set PTO balance and can submit time off requests whenever they would like. Admins will be able to approve or deny these requests at their discretion.
Screenshot showing cycle and balance structure sections, with calendar year and granted up front selected.
We recommend discussing applicable regulatory constraints with your legal advisor prior to creating PTO policies in Justworks, as certain states impose restrictions on how employers may limit carryover of accrued time off, among other restrictions.
If you select the accrual setting, you will need to select the accrual method and set up the details of the accrual basis:
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Accrual method:
- Total amount for the cycle: Enter the number of days the employee will accrue over the year. You can prorate PTO for employees who join the policy after its start date.
- Accrual rate: Enter the hours required for an employee to receive 1 hour of PTO. With this method, you can decide whether or not employees will accrue PTO on overtime hours.
- Negative balance: Allowing a negative balance lets employees submit time off requests for more hours than they currently have in their PTO balance. If their request is approved, they will have a negative PTO balance until they accrue enough to be back on the positive side.
Screenshot showing accrual rate as the accrual method and the option for allowing overtime accrual.
Policy Add-Ons
If you select Granted up front or Accrue over time as the balance structure for the policy, you can set policy add-ons:
- Carryover: Notes whether employees with a positive PTO balance at the end of the policy year will be able to carry over any of that PTO into the next year, and if so, how much. If selected, you’ll have to set a carryover limit: "limit carryover amount" requires you to enter the number of days whereas "unlimited carryover amount" does not.
- Balance cap: Sets a limit to how much PTO employees can receive each year — this would be the total yearly policy balance.
- Negative balance: Allowing a negative balance lets employees submit time off requests for more hours than they currently have in their PTO balance. If their request is approved, they will have a negative PTO balance until they accrue enough to be back on the positive side.
If you select the days per year - granted upfront setting, you will have the option to give more time off to your employees based on their length of service at your organization. You can do this by adding tenure levels.
Screenshot showing where admins can set up policy add-ons.
For a policy on the calendar year annual PTO cycle, tenure increases will occur on January 1, after your employee’s 1st work anniversary. For example, an employee with a start date in February 2025, will receive their first tenure increase on January 1, 2027. For a policy on the employee work anniversary annual PTO cycle, tenure increases will occur on the employee’s work anniversary.
Assigning Employees
After the PTO policy has been created, you can select which employees need to be assigned to the specific policy. To help break this down, you can choose to group employees by employee type, department, or office location. For example, you can create different PTO policies for full-time and part-time employees or give your employees in New York a different PTO policy than your employees in California.
Screenshot showing where admins assign employees to a policy.
You will also have the opportunity to manually adjust starting balances for assigned employees if desired.
Screenshot showing where admins can adjust assigned employees' starting balances.
Editing policies
For each active PTO policy, you can edit, manage employees, and deactivate the policy via the dropdown in the upper righthand corner of the policy.
Screenshot showing the dropdown menu on an active PTO policy.
If you need to add employees to an existing PTO policy, click on the dropdown menu for that policy, select Manage employees and follow the workflow in the Assign Employees section.
You can also unassign employees via their member profile. To do this, go the individual employee's profile via the People workspace in the left-hand side menu. Once you're on their profile, click on the Time Off tab; there you will see any PTO policies to which the employee has been assigned. At the bottom of each policy, you will see an Unassign button; click this button to remove an employee from a PTO policy.
Screenshot showing the Time off section of the employee profile with the Unassign button circled in red.
Edit policy allows you to update PTO accrual and policy settings with guardrails in place to help protect employees’ historical balances. Upon clicking the button, you will go through a flow similar to the Create new policy flow.
Screenshot depicting the beginning of the Edit policy flow.
You can update:
- Policy name and type
- Timecard sync settings
- Total PTO amounts (increase or decrease)
- Policy add-ons, such as balance cap, tenure, and carryover
If an edit would reduce an employee’s PTO balance, you’ll see an alert in the product so you can review it before applying the change.
Screenshot showing a "Balance reduced" notification due to edits to the PTO policy.
To preserve historical accuracy, the following fields can’t be changed:
- Policy start date
- Policy structure (for example, switching from unlimited to granted upfront)
If you do want to change a policy structure, we recommend disabling a current policy and creating a new one in its place. When making a new PTO policy, make sure to record all of your employees’ current balances beforehand with the PTO Balance report. Go to Analytics > PTO Balance Report and download it so that you have your employees’ balances to input as each employee’s ‘starting balance’ in your new PTO policy.
When making edits to a policy, you can also control when those changes take effect. For calendar year policies, edits can either apply to the current cycle (retroactive to the start of that cycle, not the start of the policy) or take effect at the start of the next cycle on January 1. For anniversary-based policies, edits always apply to the start of the current policy cycle, not the start of the policy. Edits can’t be applied to prior cycles, which helps ensure past balances remain unchanged.
Deactivating policies
Deactivating policies is easy. First, navigate to Time Off > Policies. From here, you should see all of your active policies. Click on the dropdown menu for the intended policy and select Deactivate.
Once you select Deactivate, a message with important information about this change will appear. Choose a deactivation date and click Deactivate policy when you’re ready.
Screenshot showing the Deactivate policy flow.
Managing Time Off Requests
When an employee assigned to a time off policy submits a time off request, their admin will have a new alert on their Justworks Payroll dashboard, prompting them to approve or deny the request.
If approved, the employee’s time off will be listed on the company calendar, and their balance will be adjusted accordingly once their time off has passed.
Disclaimer
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for accounting, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.