When it comes to paid time off from work, America doesn’t have the best reputation. Last year, researchers named the U.S. one of the worst countries in the world for giving employees paid leave.
American workers get an average of 10 paid days off per year, according to careers site Zippia. While this increases slightly after five years with the same employer, it’s still far less than workers in other parts of the world are entitled to—often by law.
With many employees having just two weeks of PTO available to them each year, situations like long-term sickness or emergency childcare can pose a real problem—presenting many people with a choice between financial instability and working through personal turbulence.
Some employers have attempted to overcome this by offering a PTO donation scheme—where employees can give up their PTO days to coworkers who unexpectedly need more time off.
In many workplaces, workers are given access to the donated leave pool when they need to take time off for cancer treatment, to care for a sick relative, or for other unforeseen emergencies—some workers are even asked to donate PTO to new moms so that they can afford to take maternity leave.
Many, however, say they have felt pressure to give up their limited vacation time, while others argue that it should be the company, not its staff, stepping up to help those in need of additional support.
‘The U.S.'s system is broken’
Earlier this year, an image of a letter to staff from the president and CEO of an unidentified company sparked a heated debate about PTO donation. The note urged all staffers to consider donating time off to a long-term employee.
“We have an employee of 17 years … who has been in the hospital and rehab for several months,” the memo read. It added that the staffer had “exhausted all her PTO” and that her benefits were running out.
“As you can imagine, this has been quite a drain on her family’s income,” the company’s boss continued. “If there is anyone who would like to donate one or more days of their PTO, please let [us] know.”
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— sarah schauer 🦂 (@sarahschauer) February 1, 2023
It is unclear how many PTO days staff at the unnamed firm are entitled to each year, or if the company offered any help to the employee mentioned in the letter.
Many who commented on the viral memo were in agreement, however, that it should have been the CEO’s responsibility to help out an employee—especially such a long-serving one—in need of additional support.
“The CEO is apparently unwilling to use some of their (probably considerably larger) resources to help a long-term employee, and the U.S.'s system is so broken that the options are either donations from others or financial ruin,” one Twitter user wrote.
“In Massachusetts public schools this is common practice,” someone else said. “People can volunteer a sick day to the ‘sick bank,’ but then you have to apply to use it… nothing like telling everyone you have cancer and begging [for leave donations] in a letter.”
“That employee's salary is already budgeted for,” another commentator added. “There are no extra costs for the employer. They could do the decent thing and support a loyal worker rather than pass that onus onto other employees who deserve their own time off.”
The post also went viral on Reddit, where the company behind the request was labeled “pathetic.”
“If anyone at any company has the power to just give PTO days to a 17-year veteran of the business, you would think it would be the president and CEO,” one person said.
“I've gotten six of these emails this year alone,” another Reddit user added. “It's absurd that they would ask this.”
Employers asking staff to give up their PTO has become so widespread that TikTokers are also using their platforms to criticize the system, with one user, who works in healthcare, labeling PTO donation schemes “exploitation” in a video. “We’ve normalized hoarding our PTO and donating it to each other because these employers don’t want to give us adequate sick leave or maternity leave,” she said.
Someone commented on the video, recalling a time that a colleague went through an unspecified “horrid event.” “[The] company sent us all cards asking for donations and PTO transfers,” they said. “The company gave NOTHING.”
Leave donation policies
In December, a poll by the International Foundation of Employee Benefit Plans (IFEBP)—which has 33,000 members across the U.S. and Canada—found that around one in five employers had a leave donation policy in place. A separate survey by the American Society of Employers found that 25% of organizations have a PTO donation program in place.
Various types of employers utilize the practice, including corporations, universities and government departments.
According to the U.S. Office of Personnel Management (OPM)—the chief human resources agency for the federal government—each government agency is required to have a voluntary leave program in place.
“A covered employee may donate annual leave directly to another employee who has a personal or family medical emergency and who has exhausted his or her available paid leave,” the organization says on its website. “There is no limit on the amount of donated annual leave a leave recipient may receive from the leave donor(s). However, any unused donated leave must be returned to the leave donor(s) when the medical emergency ends.”
A spokesperson for the OPM did not respond to Fortune’s request for comment.
‘This is why there’s no loyalty to companies’
Scott Lieberman, founder of TouchdownMoney.com, told Fortune he believed it was “despicable” for firms to expect their employees to rescue their colleagues.
“If someone is honestly sick, they should be allowed take the time they need to recover without having to beg or borrow from co-workers,” he said.
“Putting the onus on employees to cover for each other is disgusting—the employer should have plans in place for when workers need to take leave for personal or family medical reasons. PTO donation schemes are contributing to the breakdown of corporate trust. This is why there's no longer loyalty to a company.”
Meanwhile, Lauren Schneider, a Pennsylvania-based communications professional, argued that PTO pools were “ridiculous and a sure way to burn out your team.”
“This was an option in a previous company of mine and it fostered an environment of PTO hoarding, increased pressure to work, reduced employee job satisfaction, and more,” she said. “The lack of flexibility alone is a problem. Imagine having to choose ‘Do I take off sick today or do I power through in case I need to save that day for when my child is sick or so I can go on vacation this year?’”
Schneider added that she saw many coworkers with children at this organization run out of PTO days and then suffer with burnout because they had no time left to recharge.
“On one occasion, I was going to offer a day to a coworker of mine with young kids, but remembered I had to hoard my days so I could take time off for my wedding,” she said.
‘It puts a lot of guilt on employees’
A former Costco employee, who worked at a store in Utah for more than five years, told Fortune they were regularly asked to donate PTO to coworkers. Requests came from colleagues in various circumstances, including one who was undergoing extended cancer treatment.
“One co-worker donated a whole week to that co-worker,” the ex-Costco staffer, who asked to remain anonymous, said in a call. “Signs to donate your unused PTO were posted at our time clock, in our break room, and always brought up during our morning merchandising meetings as a ‘reminder.’”
During their Costco tenure, which ended in 2021, new employees were given just one working week of PTO per year. Internal Costco documents seen by Fortune show that this rose to two weeks after two years of employment, and three weeks at five years. For 10 years, employees were given four weeks of PTO, and after 15 years the PTO entitlement rose to five weeks.
“I don’t believe PTO donation is a fair system at all,” the former employee said. “It puts a lot of guilt on employees that may be saving their vacation for something really special. Being asked everyday they come into work, seeing the paper in multiple locations asking them to donate, can be really depressing.”
A spokesperson for Costco did not respond to Fortune’s request for comment.
Not all employees are against PTO donation, however.
One person commenting on the viral post from February noted that businesses “operate under a budget,” while another said they “don’t understand the outrage.”
“I was so thankful for the few days people donated to me when I had my brain tumor removed,” one Twitter user wrote. “It never crossed my mind that people thought this was a bad idea.”
Someone else said his wife’s colleagues at an unnamed government department donated six months of PTO to her when she was diagnosed with cancer at the age of 36.
It “kept her paid at 100% while she fought and recovered,” he noted. “It was equal to $50,000.”
PTO donation rules for employers
For companies interested in implementing a PTO donation policy, there are several issues to consider, such as tax implications, discrimination laws and local legislation, employment lawyer Rebecca Hudson told Fortune.
“There are very diverse state laws that may limit an employee's ability to donate a particular type of leave,” Hudson, a Denver-based shareholder at law firm Greenberg Traurig, explained in a phone call.
“We also really recommend that our clients have a written contract or agreement in place, where the employee who's donating leave is agreeing that he or she is donating leave and is aware of what they’re giving up.”
Meanwhile, Chris Goldsmith, VP and senior consultant at HR consultancy Segal, shared five things employers should bear in mind when a PTO donation system is used:
- Donations must be voluntary; they should not be coerced.
- Donors should not have a negative or low vacation balance after their donation.
- Donors cannot claim a tax deduction or charitable contribution deduction for donating leave.
- Donors cannot donate leave to a specific natural disaster recipient; donations for natural disasters must be to a pool.
- Employers should not disclose the names of recipients to donors.
