4 ms·
“Unlimited” PTO is an accounting trick. If your company has a system where you earn PTO, then the PTO each worker has earned counts as money owed on the books.
by monkpit 4y ago
“Unlimited” PTO is an accounting trick. If your company has a system where you earn PTO, then the PTO each worker has earned counts as money owed on the books.
A quick hack to make your numbers look better is to eliminate that whole PTO thing. If it’s “unlimited” then there’s no fixed number on the books that you owe.
- seanhunter 4y agoPossibly naive question, but why does accrued PTO count as money owed? You were going to have to pay salary if the person worked. If they leave/are exited, you were going to pay them notice which presumably is more than the amount of PTO they would have accrued.
- shadowgovt 4y agoI don't know the history of how it came to be, but the literal answer is "It counts as such because states regulate it." https://www.patriotsoftware.com/blog/payroll/pto-payout-laws-by-state/ https://www.patriotsoftware.com/blog/payroll/pto-payout-laws... This also means that if you're a multi-state company, you're under different legal regulations for how PTO works and multi-state compliance increases the cost of offering that perk in the first place.
- monkpit 4y agoI think it’s at least in part because it’s owed as cash (in some US states) when an employee is fired/quits.