My company is "highly recommending" PPL/PTO

[jeromedawg]

So my manager pinged me earlier this AM asking if I saw the corporate memo from the CEO discussing "Collective Rest & Refresh" - this is basically PPL they that they are "strongly encouraging" that we use, and are targeting 7/1-7/8. If not, my manager said anytime  in Q4 is fine too. I was confused because he made it sound like it's mandatory but then said it's not required when I asked. He just told me that it's "highly recommended"

The reason this came up supposedly is because of an employee survey that they took where "work life balance" was a concern for many employees. I've never had a problem with "work life balance" at the company, at least yet, so I'm wondering if this only applies to certain employees and business lines. They mention in the paragraph after this is also a "downstream financial benefit for the business" (and reduces operating costs) although I'm not quite sure how that all translates. What "operating costs" would they be referring to? I'm a remote employee so it seems any "operating cost" I'd be saving them on would be quite nominal.  I'm already taking nearly a week of time in June, but my manager is saying they are specifically targeting this for Q4. So there's definitely something related to the numbers... sucks that I can't just qualify my time off in June towards this "effort" though. Anyway, this seems to be more about the bottom line than it is about "work life balance"

It's strange because in the memo/FAQ they have outlining this, it just *feels* like it's mandatory while it supposedly isn't. Hopefully this isn't a longer-term cause for concern in terms of workplace stability. As it is, they have a company-wide shutdown for the last week of the year so pretty much everyone takes that week off (this supposedly is not mandatory but "highly recommended" hahaha - I think you have to give a good reason why you wouldn't take this time off if you did. To me that just means that it's mandatory though).  To be clear, I don't have issues with this company and they seem to treat their employees well. I'm just a little confused by this memo. Anyone have experience navigating this topic?

[MaybeBabyMustache]

I work for a mega corp, and a few things happened over COVID. 1) people didn't use vacation time, & are carrying forward more than ever. 2) work & personal life bled together during WFH, and many people are very burned out. We take company surveys that evaluate this burnout.

Our company has, as a result, emailed managers encouraging us to support our teams taking time off. And, also planned additional company days off.

A few theories as to why your company may be doing that. If the majority of folks all align around a few weeks during the year to take time off, it can be really great to minimize disruption & feels much better to return to your work, not feeling like you were the only off during that time, and frantically scrambling to "catch up". They may also have financial incentives for not carrying forward all of that vacation time on their books. Depending on your company rules, they may be required to pay out that vacation when you leave, so it's in their best interest financially if you take it?

I suppose it could also be a sign of trouble, but in tech, there's been lots of discussion about encouraging people to take time off, and not for nefarious/scary reasons.

[jeromedawg]

I work for a mega corp, and a few things happened over COVID. 1) people didn't use vacation time, & are carrying forward more than ever. 2) work & personal life bled together during WFH, and many people are very burned out. We take company surveys that evaluate this burnout.

Our company has, as a result, emailed managers encouraging us to support our teams taking time off. And, also planned additional company days off.

A few theories as to why your company may be doing that. If the majority of folks all align around a few weeks during the year to take time off, it can be really great to minimize disruption & feels much better to return to your work, not feeling like you were the only off during that time, and frantically scrambling to "catch up". They may also have financial incentives for not carrying forward all of that vacation time on their books. Depending on your company rules, they may be required to pay out that vacation when you leave, so it's in their best interest financially if you take it?

I suppose it could also be a sign of trouble, but in tech, there's been lots of discussion about encouraging people to take time off, and not for nefarious/scary reasons.

Thanks for sharing your thoughts and experience. Makes sense. I'm in the medical device field now, so not sure if this is a "common" thing to see or if they are following suit with what you are describing. I guess they view it as a "win win" for everyone. I'm just so used to racking up PTO/PPL (to the tune of 20-30 days lol) so it's not something I'm used to. I like the idea of having a reserve of PTO in case we want to go on a longer vacation (which, these days seems impossible now with kids) or for when I do leave and want to have a nice cash out. I guess there's not really a great reason to 'hoard' PTO/PPL moving forward though...

[Gronnie]

I'd be resentful of basically being forced to use a week of my precious vacation time with such little notice. With a spouse, kids, etc it's best to plan a vacation many months in advance.

[SweatingInAR]

They may also have financial incentives for not carrying forward all of that vacation time on their books.

This has happened to me before at a couple of Megacorps. It doesn't make sense with my understanding of personal accounting, but it must make sense to business accountants. Here's an old explanation that sort-of makes sense.

https://www.sfgate.com/business/networth/article/Mandatory-vacations-help-bottom-lines-Forced-2926499.php

Some companies have "unlimited vacation" policies now, which can help the company's bottom line! Now they don't have to carry vacation costs on balance sheets, and most employees will only use 2-3 weeks due to social pressure.

[Tester]

At the previous employer you would stop accruing time of when you hit 160 hours (20 days) practically forcing you to take time off.
I liked it.

[mspym]

At the previous employer you would stop accruing time of when you hit 160 hours (20 days) practically forcing you to take time off.
I liked it.

This and the unaccrued “unlimited time off” would both be super illegal in Australia. You have a mandated minimum time off which is owed to you and which has to be paid out so there is a real financial interest for the company to get people to take their leave. A number of places will force you to take or at least book annual leave once you get to a certain number of days accrued, which can also kick in for owed time in lieu

[Hula Hoop]

Here in Italy at my workplace it's similar to what @mspym described.  I've been at the same company for 15 years so now have more than 6 weeks of annual leave per year. This is in addition to almost half a year of sick leave (hoping never to have to actually use that much!) and holidays. When I started I had the statutory minimum of 5 weeks annual leave.  We aren't forced to take it but we can only carry over a certain amount per year and I always seem to end up using it for family vacations, visiting family overseas and random days off for school stuff and personal things.  It's also nice to just take random weekdays off during the summer to hang out with the kids and not put them in a summer camp that day.

I really don't understand why this poses a problem for you.  Just take a week off when the kids are on summer holidays and take them to the pool or beach every day or maybe a cool science museum or something.  Or go camping somewhere or stay in an airBNB.  Are you worried that you might need the vacation time later in the year or are you worried that the company is having financial issues? To me it sounds like the company is trying to take care of the mental health of employees and avoid burn out - which is a great thing.

[shureShote]

I'd be resentful of basically being forced to use a week of my precious vacation time with such little notice. With a spouse, kids, etc it's best to plan a vacation many months in advance.

Had this happen back in the GFC while working for an automotive supplier.  We had planned a vacation months in advance that was two weeks earlier than the mandated week. We were fortunately able to scramble and change reservations. It was a driving camping trip. If we had had plane tickets or something it would have really been upsetting.

We had also tossed out about 30% of our workforce by then, and the company was fine if more people would quit.

[Jon Bon]

This is also a common thing among folks in trust positions.

Aka if someone is stealing a little bit, but they need to be there on Wednesday of every week to do the theft. So if they are NOT there on said Wednesday then it will show up in the books as more money than usual and it will be pretty obvious why.

Furthermore it can force some level of cross training, which is good for the company as a whole as well.

[Hula Hoop]

I'd be resentful of basically being forced to use a week of my precious vacation time with such little notice. With a spouse, kids, etc it's best to plan a vacation many months in advance.

Had this happen back in the GFC while working for an automotive supplier.  We had planned a vacation months in advance that was two weeks earlier than the mandated week. We were fortunately able to scramble and change reservations. It was a driving camping trip. If we had had plane tickets or something it would have really been upsetting.

We had also tossed out about 30% of our workforce by then, and the company was fine if more people would quit.

Yes except that the employer here has said that anytime in fourth quarter is fine.  So it's flexible.  Americans are kind of notorious for not taking vacation even when they have vacation time so it sounds like they're trying to take care of the mental and physical health of their employees by forcing even the most stakhanovite employees to take a break.  Better for the company and better for the employees and their families.

[ChpBstrd]

Management is trying to massage the earnings numbers. The giveaway is how they're asking that the PTO occurs during Q4. I.e. the cost of paid time off has already been accrued, and the company saves money if it does not pay some people their salary for a week, which has not yet been accrued.

Perhaps management can see that earnings are on a razor's edge regarding some incentive package they have. Or maybe they have insider trades (sells) scheduled in advance for after earnings are announced.

[tawyer]

I like the idea of having a reserve of PTO in case we want to go on a longer vacation (which, these days seems impossible now with kids) or for when I do leave and want to have a nice cash out. I guess there's not really a great reason to 'hoard' PTO/PPL moving forward though...

Two sides to the hoarding PTO coin:
1. You use it in your retirement year, you might be in a lower tax bracket when you file.
2. You usually accrue PTO while on PTO.

[BicycleB]

Management is trying to massage the earnings numbers. The giveaway is how they're asking that the PTO occurs during Q4. I.e. the cost of paid time off has already been accrued, and the company saves money if it does not pay some people their salary for a week, which has not yet been accrued.

Perhaps management can see that earnings are on a razor's edge regarding some incentive package they have. Or maybe they have insider trades (sells) scheduled in advance for after earnings are announced.

Exactly!!!

I worked for a company that varied its policies depending on the time of year. It was obvious to me that they raised production incentives early, bc top people's priority was to hit "performance plan", and tightened quality criteria late in the year to cut off extra expenses (their second bonus criterion, or thing that top mgmt got rewarded for). Fellow employees were baffled when bonuses fell, "unfair" criteria applied, and weak employees cut. It happened every year like clockwork. With every change, the firm made pious announcements about the caring reasons why it supposedly did these things.

A few years after I left, the company was swallowed by one of the then-largest accounting scandals in history. Corporate manipulations are common but can pose stability risk for job and portfolio.

Don't believe what they say, believe what they do. You are working in an environment where believing your employer's words is not rational. Take your time in shopping for a job but look around and save your money.

You can take the vacation though, I think. :)

[alsoknownasDean]

At the previous employer you would stop accruing time of when you hit 160 hours (20 days) practically forcing you to take time off.
I liked it.

Yikes...I'm sitting at 348 hours accrued. Won't be able to take much of that until August (coming up to the peak period at work), but I'm definitely planning to take a couple of weeks off in August-September.

OP, sounds like your employer has a big leave liability on their books.

[jeromedawg]

At the previous employer you would stop accruing time of when you hit 160 hours (20 days) practically forcing you to take time off.
I liked it.

Yikes...I'm sitting at 348 hours accrued. Won't be able to take much of that until August (coming up to the peak period at work), but I'm definitely planning to take a couple of weeks off in August-September.

OP, sounds like your employer has a big leave liability on their books.

You mean probably a number of employees have large balances of PPL/PTO? That would make sense. There are quite a few 'lifers' working here. I was looking at my balance again and discussing with my manager yesterday in our 1x1 - even if I wanted to or were forced to take PPL, I can't because I haven't even accrued enough since starting in Oct. First, they made us take several days of PPL off end of year (which supposedly is a *thing* - similar to this where it's not mandatory but "highly recommended" but the difference is that the end of year PPL is a 'norm.' This mid-year PPL suggestion is a new thing it seems), and since then I've taken a couple days here and there and have a few more planned next month. By then my PPL balance will be low as it is (no more than a few days accrued). My manager alluded to others likely having larger PPL balances and as long enough people cumulatively take the time, it shouldn't be a big deal. I just don't understand why they don't implement policies that cap the accrual or limit the amount of rollover.

[mm1970]

Management is trying to massage the earnings numbers. The giveaway is how they're asking that the PTO occurs during Q4. I.e. the cost of paid time off has already been accrued, and the company saves money if it does not pay some people their salary for a week, which has not yet been accrued.

Perhaps management can see that earnings are on a razor's edge regarding some incentive package they have. Or maybe they have insider trades (sells) scheduled in advance for after earnings are announced.

This.

I've worked at places where they've done this a couple of times.  Reasons:
1. Company is (nearly) broke.  In California, unused PTO is actually owed to the employees, so if companies don't have the actual cash to pay out the leave, they can be in real trouble.  In general, it's not good to have so many debts.

2. Buyouts.  See above, affects balance sheet or one of those other accounting thingys.  I'm an engineer.

My company required us twice to use a week of PTO or sell it back.  Once years ago, when we were broke.  I refused to take the week when they wanted me to, because I literally was taking the following week off.  I just ignored the demand.

More recently this year, post COVID, because people really just weren't taking any time off.  I ended up selling a week's PTO (sad face, I'd rather take the time off) because there's no way I could have taken a week by the deadline.

[jeromedawg]

The company I'm with now actually was bought out by a larger company. I'm not sure if this is some sort of move to reduce PPL or something not just for the bottom line but also in preparation of moving to a new system under the larger company's umbrella. I think there are certain HR processes that the original company has adopted from the larger company but others where we have remained on the same system. So kind curious if it also may have anything to do with that.

[volleyballer]

I think ChpBstrd nailed it.

Some anecdata about crappy pto policies... My previous employer (engineering / consulting) made some pto changes while I was there and more after I left.
1) capped pto accrual at 360 hours, made a one-time payout to get anyone under the limit. I still knew of someone who stopped accruing because the person was on a rush project and was afraid to use PTO, and hit the limit.
2) made us all take the week between Christmas and New Years off, since it was the least productive time of year. I heard it's now upped to 2 weeks? So a new hire out of college could hypothetically have to burn half their PTO at the behest of the company, or go unpaid.
3) I heard that during early COVID times employees were "strongly encouraged" to use their PTO to smooth out the ebbs and flows of billable work. Of course, no extra compensation was given for weeks where more than 40 hours was billed.
So glad I don't work there anymore.


My current employer just caps the annual PTO carryover amount at 5 days. I would prefer a larger rollover amount, but whatever.

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[FLBiker]

Interesting to read about the wide range of PTO policies.  My previous employer was a large public university in the US, and I was capped at 358 hours of vacation time.  When I quit, I was pretty close to that, which was a nice payout.  My new employer (a private company in the US through a Canadian PEO) has generous leave (by North American standards -- 28 days a year PTO, plus 11 holidays) AND I can only carry forward 5 days to the next year.  Personally, I really like it as it gets me to take the time off (which I was much more resistant to do before when I could save it for a payout).  And, at this point (close to FI) there's no reason for me to hoard PTO.  If I wasn't forced to use it, though, I'd probably hoard a bit.