Companies are turning to unlimited paid time off (UPTO) policies that are causing employees to lose an average of $2,000 a year, according to data from Sorbet, a first-of-its-kind platform to manage employee PTO.
Sorbet’s platform allows employees to convert their unused PTO into cash. In the US alone, the value of unused PTO totals $270b., and employees are often unable to cash theirs out until they resign or are fired.
Sorbet’s research shows that the lack of 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 two 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 by their peers and managers.
“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,” said Veetahl Eilat-Raichel, co-founder and CEO of Sorbet.
Sorbet’s platform analyzes and tracks employees’ PTO usage patterns within organizations and offers personalized recommendations on when and how they should take time off in the most effective way for both them and for the organization, eliminating disturbance in the workplace.
Sorbet was founded in 2019 by Eilat-Raichel, Eliaz Shapira (CTO) and Rami Kasterstien. In June, the company closed a $21 million financing round, the biggest seed round ever for an Israeli fintech start-up, led by Dovi Frances’s Group 11, along with current investors, including Viola Ventures, Meron Capital and Global Founders Capital.