Boycott Watch  
December 17, 2012
Paid Time Off buyouts - Don't Give Your Boss a Raise
Summary: Businesses sometimes offer the buyouts as an employee benefit when it is really the employer asking the employee for a handout.
    This time of year some businesses offer their employees a chance to get extra cash for their accrued PTO (Paid Time Off) and claim it is a bonus for the employee, but nothing can be further from the truth.

    One such offering at a hospital gave employees the option of cashing in their PTO at half the value, thus giving the employees "extra" cash. Before we can examine why it's a bad deal for the employees, we need to understand how employee wages are calculated.

    Businesses budget for each employee. From the total compensation they can offer, they calculate how much they can give you per hour after they deduct the cost of benefits including healthcare, vacation and sick time. After all the benefits are deducted, they then divide the remaining dollars into the number of hours a person is expected to work to determine how much they can offer you per hour.

    By not taking a benefit, therefore, you are giving your boss a bonus. Knowing this, many people negotiate away benefits for dollars, splitting the amount with their employer. Smart applicants who are getting health care on a spouses plan, for example, should not just reject the offering by saying they don't need it. Instead, they should make a counter offer for salary without the benefit.

    As for PTO buyouts, if you are perhaps making $20 per hour and you take your employer up on their PTO buyout plan at 50%, you are just giving your employer $10 for every hour you trade in. If you are in healthcare or a related field in which your shift needs to be covered, you are giving your employer and additional $30 per hour they budged in your total compensation package since they will not need to cover your shift expense with someone's overtime salary, thus you would have taken $10 for $50 budgeted employee compensation.

    Even if your shift does not have to be covered, you are far better off taking the day off, getting the full compensation and using that time to perhaps pick up some extra part-time seasonal work, thus making more money and not giving your boss a bonus.

    Another way to look at it is by taking a PTO buyout, you are paying your boss to not give you a day off. That is because you are working and not taking the break you earned, then working at half of your salary. Either way by taking a PTO buyout you are helping your boss and not helping yourself. What you are doing though is helping your boss take more money home.

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