Do you want to sell your vacation days for cash?
You might have heard of carrying your vacation days over to the following term, but have you heard of cashing your vacation days? New startups have been popping up over the last few years in the USA to help employers to buy out workers’ unused vacation days. And the pitch sounds like this – get paid cash for the time off you earned!
To employers, PTO exchange and its rivals argue that the programs improve retention and lighten a significant financial liability for companies that pay out unused PTO when an employee leaves.
In this Pacific Prime Latin America article, we will dive further into understanding the concept of cashing out PTO and whether it’s the smart thing to do for employees and employers.
How can cashing vacation days help employers?
Cashed-out vacation days can help save companies money because by paying out in cash when an employee leaves, they might be saving as employees may be earning a higher wage at the time of their exit. However, you might have come across the new policy that has been going around – unlimited vacation days; this can offer an alternative solution to the same challenge – when no balance accumulates, there is nothing to pay for. So, many companies across the US are implementing this in an attempt to attract and retain employees for longer. It’s considered a smart move, isn’t it?
Is it easy to swap time off for cash?
It may sound simple to pay cash out for unused vacation days, but it is not. For instance, most companies offering to pay out vacation time will not let employees sell their vacation days. That is because vacation days are not meant to give money back but as an initiative to encourage employees to lead a healthy work-life balance.
The rise of cashed PTOs
Accumulated PTO balances during the pandemic have helped these programs and supporting startups to spread. An economics professor at Penn State Abington, who studies overwork and worker well-being, refers to cash-out startups as quintessentially American. In a conversation with Wired, he said, “there’s social and organizational pressure to spend more time in your non-work activity.”
Why is cashing on vacation days popular among employees?
For a handful of employees, trading their unused vacation days is more than just a simple transaction; cash may not be an option. Hence, the software platforms work on customizable and offer workers the option of converting the cash value of their time off into retirement savings, student loan payments, charitable donations, or even travel expenses.
Should you or should you not cash in your vacation days?
While the idea of getting cash for accumulated unused leaves is tempting not to utilize them, taking time off from work can help motivate you to work better. Many studies over the years have shown that vacation days can have physical and mental health benefits. People who take time off and go away on vacation have lower stress, reduced risk of heart disease, a better outlook on life, and more drive to achieve goals.
So, would you trade in your unused vacation for cash if you had the chance?
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Since joining Pacific Prime, Lakshmi has gained a comprehensive understanding of different kinds of health insurance and their importance in people's lives. Her expertise in this area has allowed her to produce informative and engaging content that helps individuals make informed decisions regarding their health insurance.
Lakshmi's clear, concise, and engaging writing style makes complex insurance concepts accessible to readers of all levels and also adheres to Pacific Prime’s motto: - “Simplifying Insurance.”
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