I honestly can’t wrap my head around this no matter how much I read.
In: Economics
In some places when you leave a job that accrues PTO, the company is required to pay you for all your accrued PTO. For example if you have worked at a job for ten years and taken very few vacations, you might have 500 hours (about 60 days worth) of saved PTO. When you leave that job, your final paycheck has to include a payout for all of that PTO at your base pay rate. If you make $20/hour you quid get an extra $10,000!
If a company has unlimited PTO, you will never have a PTO balance, which means when you leave that job, they don’t have to pay you for your PTO balance.
Many companies have decided that saving this money is worth the difficulties of giving employees unlimited PTO especially when most employees who receive unlimited PTO choose to use less PTO than employees who have set PTO allowances. Also, you can discourage people from taking PTO by giving them so much work they feel like they will never catch up if they take any time off.
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