7 ms·

It is first and foremost a cost saving measure for the company as it is a simple policy to create and enforce, in my experience, and it avoids payouts for accru

It is first and foremost a cost saving measure for the company as it is a simple policy to create and enforce, in my experience, and it avoids payouts for accrued PTO when terminating employees in some cases.

MattGaiser 5y ago
At least at my company, they still do all the tracking of it. Not sure they are really simplifying admin.
- vkou 5y ago
  It isn't meant to simplify admin, it's meant to prevent the company from having to pay out someone who worked for six years without taking a single vacation day, when they get fired/quit/die. It's also why many companies hate carrying vacation days over - they don't want someone to save up three months of vacation that they earned at a low wage from getting promoted, and then receiving it in cash when they quit at a higher wage. Given the choice, an employer will always prefer to keep payroll costs predictable.
  - 35fbe7d3d5b9 5y ago
    > It's also why many companies hate carrying vacation days over - they don't want someone to save up three months of vacation that they earned at a low wage from getting promoted, and then receiving it in cash when they quit at a higher wage. This can be a nasty carrying cost for companies. I worked at a place that went from the standard accrual of vacation to "a minimum of 20 days/year, no carry-over." To keep employees from engaging in open rebellion, they had to offer two tiers: either 1) you agreed to the new plan and gave your accrued time back, or 2) you keep your accrued time to date, received no more, and could join the new plan only when your vacation time balance hit zero. The new employees, including me, quickly picked option one. The long-timers all picked option two, sat on their time, and cashed out when they went to other jobs.
    - munk-a 5y ago
      I'd advise anyone in this situation to go with option 3) - find new employment and get the company to immediately pay out all that vacation time in cash possibly by booking your last three months with the company as solid vacation time. Once that's cleared up feel free to rejoin the company on option 2). Earned vacation time is earned - companies trying to reclaim it are acting dishonestly and need to be avoided at all costs.
    - ghaff 5y ago
      When my company switched to a use it or lose it system (with some extra days thrown in), they let everyone who had accrued vacation keep it in a separate category. I don't know if I'll ever use it but it's nice to know I have an extra bank of 3 weeks vacation if I ever want it.
  - munk-a 5y ago
    Employers can always chose to force annual vacation payout - or have reduced hour rollover (i.e. halved if rolled over). I absolutely despise any sort of vacation reduction (or full disappearing on expiration) but having the hours paid out is a pretty equitable situation. If I want to take a vacation in January and am forced to take it using unpaid hours (I'll always talk to managers about carrying over hours for some fixed vacation if they're willing and usually get positive feedback) then I'll at least end up neutral at the end of the year (or employment) when those accrued hours get paid out.
    - vkou 5y ago
      Employers don't want to force payouts for the same reason that they don't want all the other sources of variability I listed. They budget for a payroll of X, not X + 7%.
  - ghaff 5y ago
    I believe in California (and maybe one or two other states), you can't do use it or lose it. Though AFAIK, you can still cap accrual at some maximum. (i.e. once you've given someone a day of vacation you have to pay it out if they leave and haven't taken it.) Personally I don't have a problem with "unlimited PTO" but (big but) there really does need to be a culture of people taking a reasonable amount which I would define as a month or so.
    - syshum 5y ago
      >>you can't do use it or lose it. Which is why unlimited was born, because now you never "earn" any so you never "lose" any, and thus can never accrue any either
      - ghaff 5y ago
        Right. Not that I personally care much for use it or lose it myself. It definitely requires more deliberate planning and potentially taking time at suboptimal times than an accrual/cap system assuming the cap is set at some reasonable level.
        syshum 5y ago
        True, but this is an side effect once again of government meddling and it having unintended consequences See the government saw employers with "use it or lose it" policy as "screwing over" the employee, so they ban it believing all companies would just accept they would have to allow accrual of PTO / Vacation time Reality is that is not tenable for most companies and many people (like me) would just rack up years of time because we never take any off (when Possible I just cash out any PTO / Vacation I get, but many company stopped doing that as well) So in response to the government banning employee lost their access to guaranteed number of days, instead how have this "unlimited" which is also an impossibility. IMO "unlimited" is many many times worse than use it or lose it with a guaranteed number of days every year
        ghaff 5y ago
  - mathstuf 5y ago
    Heh. $DAYJOB lets us accrue vacation and then get cashed out annually for anything over 160 hours (so it is "use it or we will cash it out for you"). It pays out at your new rate as well (since annual raises are on the same schedule). It used to be tied to your work anniversary date, but it is now "just after New Year's" for everyone to make budgeting easier. I understand why companies hate it, but I also like the way I get treated as a human rather than a nameless cog in a multi-billion-a-quarter monstrosity. I, personally, prefer the "let's be human" than "$$$ at all costs" end of the spectrum. Others seem to disagree. As for how it gets used, apparently it's very bimodal and "everyone" is either a "keeper" or "flirts with having none".
bambax 5y ago
This would be illegal in Europe. How does it work in the US?
- firebird84 5y ago
  There's no accrued PTO. You just work it out with your mgr and then just...go. And you get paid for it (at least in the companies I've had it) and come back and just go back to work.
- MattGaiser 5y ago
  It basically makes time off an informal thing. You just don't show up for work when agreed with your manager.
- 35fbe7d3d5b9 5y ago
  I mean, *gestures at the US*. There are no federal or state laws mandating paid vacations or holidays. That's entirely at the discretion of the company. There is no federal paid sick leave mandate. Some states have them. We have a federal right to 12 weeks of unpaid leave for qualified medical and family situations under a law called FMLA, the Family and Medical Leave Act. Even that has limitations - small businesses, highly compensated employees, and new employees are carved out. When you are hired, all of these are defined by the companies policies or what you can negotiate. If you have paid vacation time that accrues it'll be paid out if you quit; most companies don't like that, so they give you "unlimited time" on the approval of management. But because we have no statutory protection, your unlimited time could legally be "zero hours".
  - steveklabnik 5y ago
    > There is no federal paid sick leave mandate. Some states have them. Or, you get states like here in Texas, where the state senate just passed a bill making it impossible for cities like Austin to require companies provide sick leave.
    - UncleMeat 5y ago
      "Small government."

MattGaiser 5y ago

At least at my company, they still do all the tracking of it. Not sure they are really simplifying admin.

vkou 5y ago
It isn't meant to simplify admin, it's meant to prevent the company from having to pay out someone who worked for six years without taking a single vacation day, when they get fired/quit/die. It's also why many companies hate carrying vacation days over - they don't want someone to save up three months of vacation that they earned at a low wage from getting promoted, and then receiving it in cash when they quit at a higher wage. Given the choice, an employer will always prefer to keep payroll costs predictable.
- 35fbe7d3d5b9 5y ago
  > It's also why many companies hate carrying vacation days over - they don't want someone to save up three months of vacation that they earned at a low wage from getting promoted, and then receiving it in cash when they quit at a higher wage. This can be a nasty carrying cost for companies. I worked at a place that went from the standard accrual of vacation to "a minimum of 20 days/year, no carry-over." To keep employees from engaging in open rebellion, they had to offer two tiers: either 1) you agreed to the new plan and gave your accrued time back, or 2) you keep your accrued time to date, received no more, and could join the new plan only when your vacation time balance hit zero. The new employees, including me, quickly picked option one. The long-timers all picked option two, sat on their time, and cashed out when they went to other jobs.
  - munk-a 5y ago
    I'd advise anyone in this situation to go with option 3) - find new employment and get the company to immediately pay out all that vacation time in cash possibly by booking your last three months with the company as solid vacation time. Once that's cleared up feel free to rejoin the company on option 2). Earned vacation time is earned - companies trying to reclaim it are acting dishonestly and need to be avoided at all costs.
  - ghaff 5y ago
    When my company switched to a use it or lose it system (with some extra days thrown in), they let everyone who had accrued vacation keep it in a separate category. I don't know if I'll ever use it but it's nice to know I have an extra bank of 3 weeks vacation if I ever want it.
- munk-a 5y ago
  Employers can always chose to force annual vacation payout - or have reduced hour rollover (i.e. halved if rolled over). I absolutely despise any sort of vacation reduction (or full disappearing on expiration) but having the hours paid out is a pretty equitable situation. If I want to take a vacation in January and am forced to take it using unpaid hours (I'll always talk to managers about carrying over hours for some fixed vacation if they're willing and usually get positive feedback) then I'll at least end up neutral at the end of the year (or employment) when those accrued hours get paid out.
  - vkou 5y ago
    Employers don't want to force payouts for the same reason that they don't want all the other sources of variability I listed. They budget for a payroll of X, not X + 7%.
- ghaff 5y ago
  I believe in California (and maybe one or two other states), you can't do use it or lose it. Though AFAIK, you can still cap accrual at some maximum. (i.e. once you've given someone a day of vacation you have to pay it out if they leave and haven't taken it.) Personally I don't have a problem with "unlimited PTO" but (big but) there really does need to be a culture of people taking a reasonable amount which I would define as a month or so.
  - syshum 5y ago
    >>you can't do use it or lose it. Which is why unlimited was born, because now you never "earn" any so you never "lose" any, and thus can never accrue any either
    - ghaff 5y ago
      Right. Not that I personally care much for use it or lose it myself. It definitely requires more deliberate planning and potentially taking time at suboptimal times than an accrual/cap system assuming the cap is set at some reasonable level.
      - syshum 5y ago
        True, but this is an side effect once again of government meddling and it having unintended consequences See the government saw employers with "use it or lose it" policy as "screwing over" the employee, so they ban it believing all companies would just accept they would have to allow accrual of PTO / Vacation time Reality is that is not tenable for most companies and many people (like me) would just rack up years of time because we never take any off (when Possible I just cash out any PTO / Vacation I get, but many company stopped doing that as well) So in response to the government banning employee lost their access to guaranteed number of days, instead how have this "unlimited" which is also an impossibility. IMO "unlimited" is many many times worse than use it or lose it with a guaranteed number of days every year
        ghaff 5y ago
- mathstuf 5y ago
  Heh. $DAYJOB lets us accrue vacation and then get cashed out annually for anything over 160 hours (so it is "use it or we will cash it out for you"). It pays out at your new rate as well (since annual raises are on the same schedule). It used to be tied to your work anniversary date, but it is now "just after New Year's" for everyone to make budgeting easier. I understand why companies hate it, but I also like the way I get treated as a human rather than a nameless cog in a multi-billion-a-quarter monstrosity. I, personally, prefer the "let's be human" than "$$$ at all costs" end of the spectrum. Others seem to disagree. As for how it gets used, apparently it's very bimodal and "everyone" is either a "keeper" or "flirts with having none".

bambax 5y ago

This would be illegal in Europe. How does it work in the US?

firebird84 5y ago
There's no accrued PTO. You just work it out with your mgr and then just...go. And you get paid for it (at least in the companies I've had it) and come back and just go back to work.
MattGaiser 5y ago
It basically makes time off an informal thing. You just don't show up for work when agreed with your manager.
35fbe7d3d5b9 5y ago
I mean, *gestures at the US*. There are no federal or state laws mandating paid vacations or holidays. That's entirely at the discretion of the company. There is no federal paid sick leave mandate. Some states have them. We have a federal right to 12 weeks of unpaid leave for qualified medical and family situations under a law called FMLA, the Family and Medical Leave Act. Even that has limitations - small businesses, highly compensated employees, and new employees are carved out. When you are hired, all of these are defined by the companies policies or what you can negotiate. If you have paid vacation time that accrues it'll be paid out if you quit; most companies don't like that, so they give you "unlimited time" on the approval of management. But because we have no statutory protection, your unlimited time could legally be "zero hours".
- steveklabnik 5y ago
  > There is no federal paid sick leave mandate. Some states have them. Or, you get states like here in Texas, where the state senate just passed a bill making it impossible for cities like Austin to require companies provide sick leave.
  - UncleMeat 5y ago
    "Small government."