How can Unlimited PTO Hurt U.S. Employers?

How can Unlimited PTO Hurt U.S. Employers?

In our previous post, we explored the concept of unlimited PTO, and how it could potentially help increase productivity in the workplace, create more trust between employers and their staff, and can help your clients attract new employees. Some business owners believe that the newly established employer-employee relationships may even reduce Employment Liability claims. Naturally, this idea has been met with reservations from some clients, and it is not right for every individual company. In this post we will explore some of the disadvantages of unlimited PTO and why it might not be right for some of your clients.

Unfortunately, this PTO model does not make it easy for HR professionals to track vacation time; who is to ensure that all employees are given equal, time-off opportunities? With more employers allowing their staff to be self-sufficient, it may not always be obvious to company managers when one or two workers are bogged down with work and unable to actually use their PTO, unlimited or not. This risk of inequality could be lessened with good management, but even the best managers have their limits on what they can do.

This unlimited PTO policy is also not feasible for all types of work. Employers with a large amount of staff may have a much more difficult time managing and implementing the policy. It could also be difficult for companies with multiple teams, and multiple client deadlines within those teams. Industry differences can also contribute to this; a full service marketing firm could be considerably busier year round than perhaps a trade show company that has events during certain parts of the year.

One last potential disadvantage of this model is that employees are often overwhelmed with the option to take control over their own vacation time. They may be fearful of taking too much time off, and thus not actually use any PTO and eventually could become disengaged at work as a result. Many people are deciding not to take advantage of their PTO simply because it’s too hard to figure out the right amount of time to take off.

Unlimited PTO can be a huge asset if implemented correctly. It will be interesting to see if this concept becomes more popular throughout U.S. businesses and organizations. In the meantime, if your clients don’t already offer a PTO package, they should consider offering some type of paid time off, whether it’s sick days or vacation time.

At PL Risk, we understand that any decision your client makes is with their financial best interests in mind. This is why we offer competitively priced Errors and Omissions Policies in addition to EPLI, Fiduciary Liability, and more. Please contact us today for more information at (855) 403-5982.