When paid time off goes unused, employees may as well be throwing cash away.
In 2018, American workers failed to use 768 million days of their PTO, according to the U.S. Travel Association. Those unused vacation days translate into unpaid work days, which is why fintech company Sorbet has launched a solution that enables employees with surplus PTO to easily convert those extra days into cash.
“[At the end of the year], we get employees who haven't taken enough time off, so we're forced to prompt them to try to take time off,” says Veetahl Eilat-Raichel, CEO at Sorbet. “Behind that is a very antiquated construct that's basically not working.”
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HR departments can choose to offer Sorbet as a voluntary benefit, and if selected by the employee, the platform will analyze their remaining PTO, taking into account factors such as demographics, previous consumption, tenure and seniority, as well as company constraints, policies and governance and external factors like global pandemics. It then predicts how much of the employee’s PTO is usable, and how much will probably remain on the company’s books.
“People should take time off as much as they possibly can — we believe in work-life balance,” Eilat-Raichel says. “We just recognize the fact that very often a portion of your balance is just inconsumable time.”
The employee can then cash out the hours deemed “unusable” by the platform and transfer them into a prepaid debit card sponsored by Sorbet. The company provides curated and personalized activities and experiences to encourage employees to reinvest that money in themselves. But, Eilat-Raichel says, “You don't have to. You can use it at the grocery store or Amazon or Starbucks.”
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The traditional PTO model can create obstacles for employers, too, leaving them to deal with the liability of potentially owing employees thousands of dollars in debt should that employee exit the company. With Sorbet, employers owe the fintech for the cashed-out days, and can set up payment plans directly with the platform. That means fewer headaches for employers, and more ease of use for employees.
“Employers jump through hoops trying to retain and attract talent with a variety of exotic [benefits], while the original benefit is relegated to some bureaucratic payroll item,” Eilat-Raichel says. “It’s just been forgotten, but it's an amazing asset if used properly.”
