Unlimited PTO

Still Need Coffee

Our company is considering implementing an unlimited PTO policy (with guidelines, of course). One stumbling block we've run into during policy creation is what to do with existing PTO balances.

Have any of you experienced this at your companies? I would love to have some insight as to what others have done in similar circumstances.

Still Need Coffee

I stumped the forum!!!!

NaeNae55

I don't think anyone has unlimited PTO these days. Speaking from an accounting point of view, it is a bad idea. Your liabilities could become outrageous. Then if you have a bad year and your long term high accumulation employees leave, you are in a world of hurt. I wouldn't recommend it.

Good luck!
Nae

Still Need Coffee

Actually, accounting is a big reason WHY we're considering it, because then there are no balances on the books to pay out upon termination. Currently we have several highly compensated employees with high balances, and it is definitely a huge impact when they leave.

By going to a "use what you need" (within guidelines, of course) it takes that big liability off the books.

NaeNae55

Oh! I misunderstood your post. I thought you meant no-cap leave.

I have seen two ways of changing leave types work with little fuss. One was to roll the old into the new based on some calculation, and the other was to have employees use the first leave before they could access the second. In the second case there was a payout to employees with balances over a certain amount.

I have not seen what you are proposing actually work on a long term basis. Some employees resent what others use and it causes problems, even if they fall within the guidelines. There is always someone who knows how to work the system. However, I will be the first to admit I do not have alot of experience in this method.

If it were my company, I would go your proposed method only as a last resort. First, we would reduce the cap (which we have done before). We would allow all employees 6 mos to 1 year to get their time reduced before the cap gets lowered. We allow employees to buy out their time here, payable at 50%. That helps us, especially if we get in a situation where we want to lower the caps.