It’s the end of the year and you haven’t used all of your time off. Well, now what?

In some instances, companies will allow their staff to roll-over any unused days to the following year, likely with a cap or maximum. Or, they will have a “use it or lose it” approach to paid time off (PTO.) Below are some points to consider for each scenario.

With Roll-Over

  • Employees can save their time for upcoming/anticipated life events (wedding or family leave) or a cushion for unexpected occasions.
  • There’s no pressure or rush to use or lose a work benefit. There is enough to do at the end of the year, and not worrying about using your benefits before the end of the year allows you to take some mental worry away.
  • This controls the number of employees potentially out at the same time. Not everyone will be rushing to use up their time every year, as they can always use it down the line.
  • Employees can go years without taking time off, which creates a potential for burnout. Someone could be saving up for a rainy day that doesn’t come, or just putting all their focus on work knowing that their time can be saved up and used later.

Without Roll-Over

  • You don’t have a lot of hours to track. Employees get what they get and either use it or don’t. At the end of the year, the accruals reset.
  • This accurately tracks company costs at the end of the year. PTO can be budgeted by the company and by not allowing rollover, it keeps that area of the budget consistent.
  • Employees are encouraged to use their time off. This method of PTO pushes staffers to use their time off every year.
  • Staffing projections are more accurate. Knowing the clock resets every year allows more vacations and time away to be planned for throughout the year, and management can more easily allot for and anticipate coverage needs.

With any PTO plan, there are generally guidelines to follow. Some of those can be a cap on the amount of days or hours a person can use at one time, or restrictions on the times of year that the PTO can be utilized. There may even need to be a mandated lead time when notice has to be given prior to taking vacation.

In some businesses, PTO plans won’t include a payout option at the end of the year or at the end of employment. If either is on the table for a future or new employer, ask some questions that will allow you to have a better understanding to how their particular PTO model operates.  If your company (or prospective company) offers this kind of benefit package, try to find out what some of the parameters are when taking the time off.

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