Do Hourly Employees Get Paid Time Off?
- Veetahl Eilat Raichel
- Feb 27, 2022
- 6 min read
Updated: Feb 15, 2024
The Importance of PTO for Hourly Workers and Their Employers
If you’re looking to apply to an hourly position or hire hourly employees, you likely have the same question — do hourly employees get paid time off? And should hourly employees get paid time off?
In this guide, we will walk you through the benefits and common struggles that both employers and hourly employees face when it comes to PTO.
Table of Contents
Do Hourly Employees Get Paid Time Off?
Some hourly employees receive PTO benefits while others may not.
According to the Fair Labor Standards Act (FLSA), U.S. employers are not required to offer paid time off. However, some employers choose to offer PTO for several reasons, such as:
Hiring incentives
Employee wellness
And more
Should Hourly Employees Get Paid Time Off?
At Sorbet, we believe that both employers and hourly employees can benefit from PTO. Below, we will share four reasons why PTO is beneficial to hourly employees and four reasons why PTO is beneficial to employers.
4 Ways PTO Benefits Hourly Employees
There are many ways that hourly employees can benefit from PTO.
Let’s take a look at four PTO benefits for hourly workers below.
#1: It Helps Them Feel Appreciated
As an hourly employee, PTO is a great hiring incentive since it is not offered by every employer that hires hourly workers.
Extending paid time off to hourly workers is a great way to make employees feel appreciated and valued. And when employees feel valued, they tend to stick around longer.
#2: It Creates a Better Work/Life Balance
With hourly paid jobs, it is easy for employees to place a higher paycheck above taking some much-needed time off to recharge.
Offering PTO can help encourage employees to seek a healthy work/life balance.
#3: It Allows Them to Take Time Off When They Need It
Paid time off is a great advantage for employees to ensure they don’t miss out on special life moments, such as:
School graduations
Family vacations
Holidays
And more
Hourly employees can enjoy their time off without having to worry that they won’t have a paycheck to come back to when they return back to work.
#4: It Can Improve Mental Health
Studies show that those who work excessively and don’t take time off deal with higher levels of stress than those who utilize paid time off.
PTO can give employees a much-needed mental break and help reduce burnout.
4 Ways PTO Benefits Employers
PTO isn’t just a benefit for employees — employers also benefit from providing this perk.
Let’s take a look at four ways PTO can benefit employers.
#1: It Cuts Down on Last-Minute Absences
Last-minute absences can lead to a loss in company revenue when there is not enough time to make arrangements to replace an employee’s absence with another worker.
Offering PTO allows employees to have the option to schedule time off ahead of time, which can lead to a reduction in unscheduled absences.
#2: It Helps With Employee Retention
While we are in the midst of The Great Resignation, employee retention is more important than ever.
Employee retention can help keep operating costs low, as it is much more expensive to hire and change a new employee than it is to keep a seasoned employee in the ranks.
Paid time off is a great incentive to keep employees in your workplace, especially as inflation begins to rise.
#3: It Gives You a Hiring Edge
Not every job hiring hourly workers offers PTO, which makes it a great hiring incentive for potential job applicants.
PTO packages are much more valuable to employees than standard, traditional plans that offer vacation and sick days. Offering PTO can give your company a more competitive edge when recruiting quality talent.
#4: It Lowers Administrative Costs
Tracking and approving vacation days and sick days is much more time-intensive for your human resource department. Offering PTO instead can help cut down on the time it takes to process and approve time off for employees.
How Does PTO Work for Hourly Employees?
PTO for hourly employees works a little differently than PTO for salaried positions. Instead of receiving “days” off, PTO for hourly workers is accrued in hours.
PTO policies for hourly employees can work differently depending on individual company policies. For example, some PTO policies that hourly employees may receive from an employer include:
PTO Bank — This type of PTO policy allows hourly workers to earn PTO based on the number of hours worked, which can be accrued over a period of time.
Unlimited PTO — This type of PTO policy allows hourly workers to take unlimited time off without any strict guidelines.
Why Hourly Employees Might Not Use Their PTO
Taking paid time off as an hourly employee is vastly different than taking time off as a salaried employee.
Hourly employees tend to have more control over how many hours they work and, in turn, how much money they make. For example, an hourly worker can earn time and a half by working overtime.
Because of the ability to make more money, some hourly employees fail to take paid time off and receive their standard hourly rate.
Other reasons hourly employees may not utilize their paid time off include:
Fear that they will get behind on work from taking time off
Fear that they cannot afford a vacation or afford to take time off
Fear that their team or fellow employees may feel overwhelmed without their presence and help
Fear that they will look like a less-dedicated employee if they take time off
Why This Is Bad for Employers
Unused PTO can turn into substantial financial liabilities for employers, especially when inflation comes into play.
For example, if an employee has 240 unused PTO hours and receives a raise, the employer now has to pay for time off based on that raise instead of their previous wage.
Employee burnout due to not using PTO can also cause financial consequences for employers, as hiring and training new employees is significantly more expensive than retaining employees.
2 Types of Hourly Workers That Can Benefit From PTO — And Sorbet
There are two types of hourly workers that typically benefit from PTO:
Blue collar workers
White collar workers
Let’s take a look at how these types of workers can benefit from PTO and Sorbet’s PTO solutions.
#1: Blue Collar Workers
Blue collar workers, such as those working in industries like …
Construction
The food industry
The hospitality industry
And more
… can benefit from receiving PTO.
However, many blue collar workers tend to use their paid time off to pursue other jobs to bring in more income. This can lead to negative effects of overworking and cause burnout.
Most companies would prefer their employers to be able to:
Maintain their job within their own company; and
Avoid becoming overworked and overstressed.
Luckily, Sorbet offers a solution to this problem.
Sorbet Lite offers employees the ability to cash advance their unused PTO, giving them access to cash that may replace taking paid time off to work more. Cashed out PTO can be immediately loaded onto a Visa debit card and spent anywhere!
Employees also have control of how much unused PTO they want to cash advance at a time, so there is always an option to take much-needed time off or cash in PTO for additional funds.
#2: White Collar Workers
White collar workers like …
Lawyers
Sales reps
Consultants
And more
… can also benefit from PTO.
Many white collar workers tend to utilize PTO to take a vacation or simply step away from work for a while. However, like other hourly employees, white collar workers may choose to not utilize their PTO for reasons like:
Not being able to afford to take a vacation
Feeling awkward about requesting time off from their managers
Feeling guilty about taking time off; or
Simply not having the ability to utilize all of their PTO before it expires
Sorbet puts all of the control in the hands of employees by allowing them to utilize their paid time off and cash advance on any PTO that they can’t use.
For example, if a lawyer has 192 unused PTO hours but can only take 144 hours off before the end of the year when their accrued PTO expires, the other two days of PTO can be converted into cash.
With Sorbet, employees can take time off in the following increments:
One scoop = 3 hours off
Two scoops = 6 hours off
Three scoops = 9 hours off (full day)
So whether employees need a few days off or just a few hours off, they have full control to select pre-approved time off with Sorbet.
Sorbet Makes PTO a Win-Win for Hourly Employees AND Their Employers
Let’s face it — the concept of PTO is broken. What is meant to be a benefit can be a huge detriment to both employees and employers.
Sorbet revolutionizes the concept of PTO and helps balance work and life for employees while rebalancing the balance sheet for employers.
With Sorbet, you can have your dessert and eat it too.
Click here to schedule a demo and make PTO a win-win!
