We conclude with a discussion of the theoretical and societal implications of UPTO. In reviewing the literature from different fields and integrating existing theories, we arrive at a conceptual model and five propositions, which can guide future research on UPTO. We moreover discuss the boundary conditions which facilitate or inhibit the successful utilization of UPTO on individual, team, and organizational level. The core of our article constitutes the description of the effects of UPTO and the two pathways through which these effects are assumed to unfold: autonomy need satisfaction and detrimental social processes. Next, we discuss the key role of leave utilization in translating UPTO into concrete actions. We start out by defining UPTO and placing it in a historical and international perspective. In this conceptual review, we discuss the theoretical and empirical evidence regarding the potential effects of UPTO on leave utilization, well-being and performance outcomes. While on the one hand, paid time off is considered a key benefit by employees and unlimited paid time off policies (UPTO) are seen as a major perk which may help in recruiting and retaining talented employees, on the other hand, early adopters reported that employees took less time off than previously, presumably leading to higher burnout rates. Unlimited paid time off policies are currently fashionable and widely discussed by HR professionals around the globe. 5Department of Organizational, Business, and Social Psychology, Psychologische Hochschule Berlin, Berlin, Germany.4Department of Occupational, Economic and Social Psychology, University of Vienna, Vienna, Austria.3Department of Business Psychology, University of Applied Sciences Bonn-Rhein-Sieg, Rheinbach, Germany.2Department of HRM&OB, Faculty of Economics and Business, University of Groningen, Groningen, Netherlands.1Faculty of Social Sciences, Tampere University, Tampere, Finland.Syrek 3, Jana Kühnel 4* and Tim Vahle-Hinz 5 Likewise, what if your company has committed to paying out unused vacation days and the same situation occurs? And what if you’ve had to lay off teammates-does your company promise PTO payout?Īn audit can help prevent these potential risks. By considering your company’s financial health and the benefits package that it offers, plus any federal or state PTO laws that may apply, HR can lead the charge towards meaningful PTO change-and a healthier organization.įor more information and a template, check out this article: How HR Can Remind Employees to Use PTO Benefits.Jessica de Bloom 1,2, Christine J. In others, such as the COVID pandemic, a PTO review could save your organization from financial ruin.įor example, if each of your employees decided to save their accrued time off and use it all at once during December, your company could lose an entire month of productivity. In some cases, conducting a time off policy audit may require a few small adjustments to accommodate an organization’s workforce. Are PTO Blackout Periods Legal?Ī PTO audit is an essential part of ongoing HR compliance. Employers, however, can segment PTO policies based on tenure, location, time commitment (i.e. The EEOC states that an organization’s PTO policy must not discriminate on the basis of race, color, religion, sex (including gender identity, sexual orientation, and pregnancy), national origin, age (40 or older), disability, or genetic information. Equal Employment Opportunity Commission (EEOC). If an employer offers paid leave, it is important to note that it must be done so in accordance with the standards of the U.S. If the prevailing local standard is to offer PTO, then PTO must be offered. These two acts use the prevailing local standard for fringe benefits to determine if PTO needs to be offered. There are, however, two exceptions: Employers engaged in government contract work and federally-supported contract work falling under the McNamara O’Hara Service Contract Act (SCA) or Davis-Bacon and Related Acts (DBRA). Most employers are not required by federal law to offer paid time off in the United States.
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