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ACCRUED PTO VS. UNLIMITED PTO


Spring break season is officially here! It's time to take a look at your paid time off policies. Some companies provide unlimited paid time off while other organizations employ an accrued paid time off system. Is there a right or wrong system? We are looking at the pros and cons of each system here.

 
UNLIMITED PTO VS. ACCRUED PTO

"Let’s face it, we all need a break. Whether you have a work-to-live or a live-to-work persona, there is one thing for sure: we tend to overwork ourselves. Are we to blame? Not necessarily. We often design our work ethic based on our managers and other higher-ups. No matter your position at a company, a little paid time off never hurts anyone, so why shouldn’t we use it?

That said, companies often decide to go one of two routes for their PTO policies: unlimited PTO or accrued PTO. An unlimited PTO policy allows employees to take off as many days as they want each year. For obvious reasons, unlimited PTO has been a huge request from job seekers, increasing job postings with unlimited PTO by 178% from 2015-2019.



In contrast, with an accrued PTO policy, employees earn paid time off days over a period of time. This time can be accrued hourly, weekly, monthly, annually, or per pay period. Typically, employees on an accrued PTO system average 10 days of PTO per year. Do you tend to stay with a company for long periods of time? With accrual PTO, the most loyal employees are rewarded with PTO benefits." Learn more


IS ACCRUED PTO BETTER?

"One of the more alluring benefits for prospective job candidates is having unlimited paid time off, or PTO. But while the premise of having no cap on how many vacation and personal days you can use seems like a dream come true, one global head of HR is going viral for explaining how earning accrued PTO is actually better in the long run. n a clip that's been viewed over 71,900 times, a TikToker named Amy explains that with unlimited PTO, your company isn't required to pay you out for the days you didn't use (since there is no limit to them), which means you're losing out on money, in the long run, should you leave the company.

"Accrued PTO ensures that you can either take time off or you are paid for the time that they say you should take time off for your mental health," she told viewers. "It saves the company a ton of money not to carry this on the books, the amount of accrued PTO that they have to pay out when someone leaves." Learn more


IS UNLIMITED PTO BETTER?

"Employers are increasingly looking for ways to attract and retain the best talent in consultation with their advisers. One approach that is gaining momentum is shifting from accrued paid time off, which allows employees to earn PTO over time, to unlimited time off. But the transition isn't always a smooth one.

With job openings in the U.S. outnumbering unemployed Americans by a margin of more than four million, companies are doing everything they can to draw top talent and keep employees engaged. According to a recent report from The Wall Street Journal, starting salaries and annual pay raises for existing employees are growing at their fastest pace in 25 years. And while cash may be king, employers are also experimenting with nontraditional policies — including unlimited time off — to gain a competitive edge." Learn more

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