U.S. workers famously don’t take all their paid time off. According to annual studies by the U.S. Travel Association, the American workforce forfeits 246 million earned vacation days annually in what amounts to a $65.5 billion gift to employers every year.
Now add in a global pandemic that scrambled everyone’s work schedules for two years and made it almost impossible to find a place to vacation, even if you wanted to go. In 2020, Americans gave up 33 percent of their PTO. Some companies have “use it or lose it” policies that make employees forfeit unused vacation days at the end of the year, so some of those hours are gone forever.
But every interesting problem sparks innovation, and enterprising entrepreneurs Rob Whalen and Todd Lucas launched PTO Exchange in 2017, a virtual platform that gives employees more options when it comes to cashing in their leftover vacation hours.
Through PTO Exchange, employees can use leftover PTO in ways that make more sense to them, like putting the cash value toward retirement funds or student loans or making charitable contributions. Workers can choose how to use their excess or unused time, and no one has to forfeit hours they’ve earned.
Workers don’t always realize that PTO is a funded balance sheet liability for most employers. The funds for time off are kept on the books in case the employee is terminated or quits and PTO must be paid out as final compensation. PTO Exchange can reduce the company’s liability and lets the employer set limits on how much time can be converted. They can also limit the options employees can choose from to convert PTO.
Companies pay a transaction fee for each employee exchange, and a small part of the value of the exchange is withheld to comply with IRS guidelines. Employees have 24/7 access to their dashboard, and HR administrators also have access to the entire company’s accounts.
This could be a game-changer in the labor market as companies try to attract and retain talent from multiple generations. The program allows young workers to convert PTO to pay off student loans. Workers with families may choose to fund HSAs (Health Savings Accounts), start an emergency fund, or set up a fund for future education. Older workers can choose to convert their time to fund retirement accounts.
PTO Exchange makes it easy for companies to set up a leave-sharing bank, so team members can donate time to coworkers with serious medical conditions or who are taking care of family members. Workers can also donate to over a million certified nonprofits representing thousands of causes which makes it easy for employers to set up a company match program for donated funds or volunteer hours.
There’s even a plan that allows employees to convert PTO to travel upgrades. Hours can be translated into flights, accommodations, and other services for their vacations when they do take them. In business, we’re fond of saying “time is money.” This platform makes that a true statement for workers at companies trying new ways to attract talent and increase the satisfaction of the employees they have.