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Many companies are turning to Unlimited Paid Time Off (UPTO) policies, which is causing employees to lose an average of $2,000 yearly, according to data from Sorbet, a first-of-its-kind platform to manage employee paid time off for companies and their employees.

According to Sorbet, it is often believed that companies offering UPTO are doing so with their employees’ best interest at heart, but in reality, UPTO is a finance trick that only works in the favor of the employer, disguised as a generous employee perk.

Sorbet’s research shows that the lack a clear policy with a set amount of days off agreed upon by both sides (employee and employer), causes employees with UPTO to use an average of 2 days less per year, oftentimes triggered by the misleading notion that they might have already used “too many days,” worrying about how it may be perceived to their peers and managers.

According to Sorbet, in companies that offer paid time off (PTO) policies with accrual days, employees tend to spend an average of 15 days off per year from the 20 days offered to them. In most cases, employees are entitled to carry unused days over to the consecutive year or get compensated for those days when they ultimately leave the company.

This explains why the financial significance of an UPTO policy is a loss of $2,000 per year in income for each employee, and in return - a gain of hundreds of thousands, if not millions of dollars for employers (depending on the number of employees in the organization). Employers looking for a quick financial gain should be concerned about the potential long term effects like burnout, decrease in productivity and increased turnover, Sorbet noted.

Sorbet’s platform analyzes and tracks employees’ PTO usage patterns within organizations and offers personalized recommendations on when and how employees should take time off in the most effective way for both them and for the organization, thus eliminating disturbance in the workplace and reaching the company’s goals.

“On top of the very clear financial loss for employees, UPTO policies also create a latent tension within the company, as it turns a basic right given to employees - taking a break from their job - into a culture issue where taking time off is perceived as being lazy or a lack of motivation,” says Veetahl Eilat-Raichel, Co-founder and CEO of Sorbet. In some cases, employees that took “too many” days off for medical or personal reasons were called off or even fired.