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Vacation leave and sick leave are mentioned in law, and companies are required to keep funds in reserve to pay for those balances. PTO was invented to stop peo
by logfromblammo 9y ago
Vacation leave and sick leave are mentioned in law, and companies are required to keep funds in reserve to pay for those balances. PTO was invented to stop people from using sick leave when they weren't sick, and to avoid having to keep the cash liability for leave balances on the books.
Usually, the combination results in fewer days of available leave, and since vacations are often planned months in advance, people are forced to come in to the office while sick or spoil their entire vacation by screwing up the itinerary.
- ghaff 9y agoPTO balances are typically still liabilities because they're owed to employees when they leave modulo accumulation caps or use it/lose it policies. It's pretty much inevitable that pooling sick time and vacation time results in a lower total. People aren't really expected to use all their sick time in a given year if ever. But for those who do plan to maximize their use of vacation, it means there's not a lot of margin when they do get sick and it encourages behaviors that aren't good for anyone.
- moron4hire 9y agoEven worse: so-called "unlimited" leave policies. It's basically "no obligation for leave at all". Hence why it's very popular with the startup crowd these days.
- ghaff 9y agoFrom an accounting perspective, there's also no (or very limited) liability associated with accrued vacation time. (There may be some associated with required sick days.) If someone leaves the company, there's no accrued time to pay off.