Would You Sell Your Vacation Days for Cash?

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PTO Genius, another startup launched in 2020, nudges employees that its algorithm guesses are at risk for burnout—based on factors like long hours and behavior changes—to take vacation. If they decline, the service offers to cash out unused PTO to help an employer offload that liability. Rob Whalen, cofounder of six-year-old PTO Exchange, describes an influx in demand this year and says his company now works with 60 employers covering more than 200,000 workers.

“Bernie,” who asked to be identified by a pseudonym because he feared angering management, is a municipal government employee in Florida. He can cash out to 35 hours of PTO each year—around a fifth of his combined vacation and sick time— and usually maxes out that allowance. He rarely takes time off, reluctant to saddle coworkers in his small department with extra work, and sees the program as a consolation. “It’s a way for people to get something back when they don’t have the protections of a union position,” he says, which can help workers assert their right to time off.

Lonnie Golden, an economics professor at Penn State University who studies overwork and worker well-being, sees cash-out startups as quintessentially American. He can’t imagine them taking off in, say, Western or Northern Europe, where, he says, “There’s social and organizational pressure to spend more time in your nonwork activity.” The US is the only rich nation that guarantees no paid vacation time. Nearly one in four US workers, most of them low-income, receive no PTO at all.

For some employees, trading in their PTO is not a simple transaction—and cash may not be an option. The software platforms employers use are highly customizable and can give workers the option of converting the cash value of their time off into retirement savings, student loan payments, charitable donations, or travel costs. Some uses might convert PTO at a higher rate than others.

But cash appears to be what employees want, says Sorbet’s Eilat-Raichel. “​​For the most part, employees just want to use this for gas and for Pizza Hut,” she says—extra help with routine expenses. One former employee of the genetic counseling company InformedDNA, which uses PTO Exchange, says that cash wasn’t an option. She asked not to be named to avoid conflict with the company. After racking up a glut of PTO during the early days of the pandemic, she exchanged her time for a hotel room at a friend’s wedding. “I was glad I could use the hours for something,” she says. “But I would have preferred just to get money for it.”

The employee also wasn’t sure if the value of the hotel equaled the value of the time she’d earned. It probably didn’t, given PTO Exchange’s standard fee. InformedDNA didn’t respond to questions from WIRED about its program.

As the climate the economic grows less certain and some companies begin to shed staff—triggering payouts of unused PTO—Eilat-Raichel sees cash-out programs as a way for employers to reclaim some balance sheet predictability. But Bersin, the HR analyst, says the potential recession has employers more focused on productivity. That suggests they should want employees to use all their time off, he says, because well-rested people get more done. “You really want to have a work environment where people are taking vacation, because then other people feel comfortable taking vacation,” he says. “If you want to give somebody some money, just give them the money. Why take it out of their time off?”

In July, Javon Garcia left his job at Howard Brown. Nearly two years of working through the pandemic in relative isolation burned him out. He’s glad he could cash out his time when he needed the money, but what he ultimately craved was a break. He’s now traveling through Europe. It’s unpaid—but much needed—time off.

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