Understand the Differences: Paid Time Off vs. Unlimited Time Off
In California, many employers offer Paid Time Off (PTO). However, there is a growing trend, especially in certain sectors, like the tech sector, where employers are offering their employees Unlimited Time Off (UTO) to entice them to join the company. It is important for employees to understand why Unlimited Time Off is actually bad for employees.
Unlimited Time Off, in its purest form, is a policy that could offer employees the ability to take as much time off as they need. However, employees who utilize an Unlimited Time Off policy will typically require their employees to request and obtain prior approval before they can take any time off. If the request for time off under an Unlimited Time Off policy is not approved, in part or in full, the employees would not be able to take advantage of the policy.
On the other hand, an employer who offers Paid Time Off allows employees to take time off from work and receive their regular pay for the hours they would have worked. This can apply to vacation time, sick days, and personal days. The amount of PTO is typically earned as the employees remain employed and working for the employer. PTO hours are also accrued if the employee does not use the earned PTO hours.
The major benefit that PTO offers over Unlimited Time Off is the ability for the employee to get paid out for those PTO hours accrued but not used.
Although an employer may pitch having Unlimited Time Off to sound more flexible and employee-friendly, in actuality, it is not. It is critical for employees to understand the potential drawbacks and limitations of this policy.
TONG LAW is available to assist employees in navigating these employment issues and help you protect your employment rights. If you have any employment law questions or concerns, please do not hesitate to reach out to us by filling out the form on our website at www.tong-law.com.
Attorney Advertising: Information contained on this website is for general information only. Nothing on this website should be construed to be legal advice and no attorney-client relationship has been formed.
Author Bio
Vincent Tong is the CEO and Managing Partner of TONG LAW, a business and employment law firm located in Oakland, CA. Vincent is a fierce advocate for employees facing discrimination and wrongful termination. With several successful jury trial victories and favorable settlements, he has earned a strong reputation for delivering exceptional results for his clients.
In addition, Vincent provides invaluable counsel to businesses, guiding them on critical matters such as formation and governance, regulatory compliance, and protection of intellectual property assets. His depth of experience allows him to anticipate risks, devise strategies to avoid legal pitfalls, and empower clients to pursue their goals confidently.
Vincent currently serves as the 2021 President of the Board of Directors for the Alameda County Bar Association and sits on the Executive Board for the California Employment Lawyers Association. Recognized for outstanding skills and client dedication, he has consecutively earned the Super Lawyers’ Rising Star honor since 2015, reserved for the top 2.5% of attorneys. He also received the Distinguished Service Award for New Attorney from the Alameda County Bar Association in 2016. He is licensed to practice before all California state courts and the United States District Court for the Northern and Central Districts of California.