How to Get More Out of Your PTO Benefit

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What's new and differentiating for you and your organization to retain your most valued and highly skilled employees? How can organizations more broadly support all employees, especially on the heels of COVID-19?

Our own Josh Reinhard sat down with Betsy Kamler on Lipscomb & Pitts' "Benefits @ Work" podcast. Listen in on their conversation as they discuss how employers can get more out their existing PTO benefit.


PTO Exchange is a benefits platform that turns unused paid time off (PTO) hours into retirement accounts, student loan payments, donations, leave-sharing, charitable causes and more.


PTO Exchange gives companies an enticing benefit that uniquely serves every employee in the organization. And it all works within the system you have in place today.

It’s savvy to reduce PTO balance sheet liabilities while enhancing talent recruiting and retention. In simple terms, it pays off for both HR and Finance. Both will appreciate the returns for enhancing PTO benefits and reducing corporate liability.


Lipscomb-Pitts-InsuranceHeadquartered in Memphis, Tennessee, Lipscomb & Pitts offers a comprehensive suite of insurance solutions to protect business and life from the unexpected. We don’t just sell insurance. We market our clients’ companies to obtain the broadest coverage at the most competitive premium with the best carrier.


You're listening to the Benefits @ Work Podcast, where we explore unique employee benefit offerings and programs to help improve your company and workplace culture. We cover wellness, technology, trending hot topics, and more. Now here's your host, Director of Client Engagement at Lipscomb & Pitts Insurance, Betsy Kamler.

Betsy Kamler: Hello and welcome to our Benefits @ Work Podcast. I'm Betsy Kamler, Director of Client Engagement here at Lipscomb & Pitts Insurance. And today I have Josh Reinhard, he's the VP Sales with PTO Exchange. Hey, Josh, and thanks for joining us today.

Josh Reinhard: Thanks so much, Betsy, I'm happy to be here.

Betsy Kamler: Yeah, well with the COVID pandemic, a lot of things have surfaced, different types of resources and benefits and PTO Exchange seems to be one of those unique features that have run across the horizon here. And PTO has always been difficult, even before the pandemic, we're all guilty of leaving time on the table. I know I hate to do that myself and especially with COVID hitting last year, everybody was at home and of course, it was hard to take a vacation or go anywhere. So, I know this has been a big benefit and you guys are right, first and foremost on the scene on it. So, tell us a little bit about your background and about PTO Exchange.

Josh Reinhard: Sure. So again, I'm the Vice President of Sales with PTO Exchange. I've been in sales for the better part of the last 18 years, and in the HCM space specifically in the last 10. So, I focus primarily on making sure that HR and total rewards folks are aware of PTO Exchange. I know we're somewhat of a new concept, but we want to make sure people understand how it can give choice and flexibility, really to a multi-generational workforce and to ultimately help HR and finance teams shed some of the liability associated with that excess PTO as we haven't been able to take vacations.

Betsy Kamler: Yeah, exactly. And what would you say was the impetus for PTO Exchange?

Josh Reinhard: Yeah, interestingly, our co-founder Rob Whalen used to work for Cisco in his past. And when he left the company, he was paid out a huge sum in unused PTO that he had accrued over the years. And he was thinking that this was a total waste. It would have been better off if he had had access to the excess time, so he could have used it to help pay for a summer vacation with his family, or put some of these additional funds into his retirement account. So, it could have been earning money for him over time, rather than just sitting there on the books of Cisco and then ultimately being paid out to him when he left the organization.

Betsy Kamler: Yeah. I know, I can imagine. I was thinking I used to work for a company many years ago that used to be based here in Memphis and I don't think we had any liability, or any structure, or anything to as far as how much vacation you could roll over each year. And we had people that probably in his same situation where they just had days, upon days, upon days of vacation that would roll over every year that would never get used. And you're right. If they left the company, whatever happened, they were paid out that large sum. So, I know that happens to a lot of companies across America, again, especially since we're dealing with this pandemic as well, but how can employees use PTO Exchange and how does it work?

Josh Reinhard: Yeah, so PTO Exchange, we're a platform that allows employees to self-direct the value of their paid time off for different needs, causes, and experiences. So, really we have three categories of options for exchange and the most popular use case is around financial wellness. And that's really what we're designed to help with. So, employees can exchange their time for 401(k) contributions. They can pay down student loans, they could fund their HSA, or they can help cover the cost of unexpected bills. So, we've seen a lot of uptick in those specific plans. As some families have gone from two-income households to one, or maybe some employees have had to take reductions to salaries. Those financial wellness plans have really taken hold within our client base. But beyond that, we also have options for social wellness plans. So you have the ability to exchange a few hours, to make a donation to a charity, or share time with a coworker that's in need.

Josh Reinhard: For the charitable donations, our system integrates with the IRS's database of 501(c)(3) and employees can search for the nonprofit that they want to support and take a couple of hours to help give to the cause. So for philanthropic organizations, it becomes a really useful tool as employees don't just always have the ability to pull out their checkbook and make a donation for the amount that they'd like. So this gives them a chance to take what feels like almost like found money to support the causes that matter to them. And then the last plan we have is around travel. So, the idea here is you have an employee maybe that accrues five weeks of PTO each year, but only goes on vacation for a week or two in the summer with their family. They could use some of that excess time to offset the cost of hotels, or other travel-related expenses to allow them to go on a vacation they otherwise couldn't have afforded, or maybe upgrade a vacation. Maybe they stay at a four-star hotel instead of a three-star hotel.

Betsy Kamler: Yeah, I know there's many of us that would love to be able to use some of those options instead of leaving it on the table, so to speak. But how can clients customize which options are available? Because you mentioned there's different packages and different ways you can do that. And are there restrictions that employer needs to be aware of?

Josh Reinhard: Yeah, the system itself is entirely customizable. So an employer can choose which of those plans that I just mentioned, they want to turn on or turn off for the employees. And then beyond that, the employer also gets to decide how much time an employee can use. We're not trying to replace paid time off. We understand the value of employees getting out of the office and refreshing and recharging, it's that excess time that we're really trying to solve for. So for instance, an employer can say that an employee always needs to carry a balance of say 40 hours in order to be eligible to exchange on the platform, provided that they meet that threshold. They can also set an upper limit and say they can only exchange up to 80 hours in a given calendar year. So, you're really trying to control what can be exchanged and drive the kind of behavior that you're looking to drive.

Betsy Kamler: Yeah. Yeah. Great idea. And again, I feel like we've talked about this so much, because here we are a year later with COVID, but it's still very prevalent with us what's going on, but how would you say COVID and the transitions to remote workforce and again, just all the different scenarios that have happened this year. How has this impacted you guys?

Josh Reinhard: Yeah, I mean, I would say one of the very few silver linings of COVID for us has been that it's really shine the light on how much excess PTO companies have out there sitting on their balance sheet, because people didn't have the ability to go on vacations like they normally would. PTO requests were down about 34% last year. And I think we're going to see some of that again in 2021, while I'm optimistic that things will get better. I think that we're still looking at a situation where employees can't take paid time off the way that they normally do.

Betsy Kamler: Right.

Josh Reinhard: So, some companies have to take a hard look at what they wanted to do in terms of their PTO policy. So we talked to many who allowed employees to carry more time than normal from 2020 into 2021. Really effectively they're just kicking the can down the road another year with the liability that's sitting on the books. We talked to others who kept a strict policy and many of their employees were upset about that loss of a benefit that they couldn't take advantage of. And it was really encouraging to see more and more companies become interested in a solution like ours because it allows employees to get value from this part of their accrued compensation while also shedding some of the liability that's sitting on the books. But one of the interesting things, and Betsy, you said it early in the podcast that this is a major problem even before COVID, so pre-pandemic, even going 2019 and earlier, on average employees in the U.S. leave over a week's worth of paid time off on the books every year. And that equates to over $155 billion of unused paid time off.

Betsy Kamler: That's crazy.

Josh Reinhard: It's crazy. Yeah. And some of that is forfeited because of use it or lose it policies, but the majority of it gets carried forward from one year into the next and now employees amass a huge balance. Companies are sitting with a huge liability on their balance sheet. So, while COVID and a lack of PTO options, shined the light on the problem last year, it's really been bubbling under the surface for a long time and it's not going to go away once life goes back to normal. Betsy Kamler: Yeah, exactly. Unfortunately, you're exactly right. And that is just nuts. The amount of dollars there. And again, like we said earlier, I mean if the employee were to leave, unfortunately, your company has to experience a layoff, whatever, you know that could potentially have to be paid out. And that's a lot of money for the company obviously.

Josh Reinhard: Yeah.

Betsy Kamler: Have you found there's a particular employee demographic that uses PTO Exchange as opposed to another? Josh Reinhard: Not really. That's kind of the beauty of PTO Exchange. Our solution is really designed so that every employee can get value from the platform, really regardless of their age, or their circumstances, or their station in life. A lot of the companies I talk to initially consider PTO exchange, because they're trying to solve for student debt and they hear that employees can exchange paid time off to pay down their loans. And I think that's a worthy challenge for a total rewards team to take on. And I think it's really topical right now, but one of the things about that is when a company rolls out a program like that, you're only speaking to a subset of the employee population.

Josh Reinhard: So, to be able to take a solution like ours, that can help out millennials or Gen Zs who are dealing with student debt, but can also be used by baby boomers who are thinking of leaving the workforce soon and want to maximize their 401(k), or HSA before they leave the workforce. Our platform helps with that. Or Gen Xers who just started a family and want to use some of the extra time to offset the cost of a vacation, or help pay for unexpected bills. They have the ability to do that, or an employee who has a nonprofit that they want to support, but doesn't have the disposable income to write the check they want to, they can reach in and use a few hours of excess PTO to donate to that cause. So, these employees have major milestones that they reach in life, and one of the things that we're really proud of is that our solution can help employees at every step of the way.

Betsy Kamler: Yeah, that's great. And again, with the fact that a lot of this saves the company money in the long run, it gives more opportunities for the employees. You earlier kind of touched on this, but how does it help the finance department within a company?

Josh Reinhard: Yeah, so typically PTO Exchange, our entry point tends to be with HR or total rewards folks, but the conversation always will include finance at some point along the way. So, one of the best parts about PTO Exchange is that we act like a voluntary benefit in a couple of ways. The first is that our solution is completely optional for the employee. So, if they want to continue to use pay time off the same way they always have, that's completely fine. And we understand that we're never going to get a hundred percent participation, but when they do use us, the employee is the one that absorbs the cost to make the transaction. So, we don't charge any kind of per employee per month fee, or any kind of minimum number of transactions. So, when the HR team wants to move forward with PTO Exchange they don't need to carve out additional budget to make it work.

Josh Reinhard: So, that's one piece of it that resonates really well with finance. But the other part is when we're speaking with finance, most controllers and CFOs love our solution, because they know that they're sitting on this huge liability of excess PTO that's on the balance sheet and needs to be offset by cash. So, if they can shed some of that liability and pay it out at a discount, which is what the IRS requires when you exchange your paid time off, they see this as a way to generate positive ROI. Josh Reinhard: They also understand that because of the way PTO works, it's a liability that naturally grows over time through year over year salary increases. So if an employee earns 40 hours of paid time off when they make $50,000 a year, but holds on to that PTO and then uses it later in their tenure, or maybe it gets paid out when they leave the organization. And now they're making $60,000 a year, that PTO just became 20% more expensive for the company. So, being able to pay that paid time out again at a discounted rate before year over year increases kick in, becomes like a double win for the finance department.

Betsy Kamler: Yeah. Very interesting. It makes perfect sense. I mean, this is a great concept. And if companies want to learn more, what's the best way for them to learn more about your company?

Josh Reinhard: The best way would be for them to reach out to their contact at Lipscomb & Pitts and set up a meeting with me to chat more about PTO Exchange. We're really excited about the opportunity to partner together with you and look forward to bringing this solution to more of your clients across the country.

Betsy Kamler: Perfect. Well, thanks so much Josh for joining us today. Hopefully, our audience found this information helpful, and just like Josh mentioned, feel free to reach out to us. I can be reached directly at my email at and be glad to help you and put you in contact with Josh and get this program going for you. So again, we thank you, Josh, for your time today.

Josh Reinhard: Thanks, Betsy appreciate it.

Betsy Kamler: Thanks.

Thank you for listening to the Benefits @ Work Podcast, to learn more about wellness, technology, and compliance, head to, or follow us online at LP Insurance.

Build Your Company's "Reputational Excellence" with PTO Exchange

Companies are facing a dilemma about how to address employees' reluctance to take time off.

The demand for talent means many companies will not be able to fill and retain skilled positions as the economy rebounds after COVID. PTO Exchange creates a highly differentiated benefit to retain key talent and enhance financial security, while allowing companies to reduce a ballooning PTO liability.

This is a notable time with many companies making bold adjustments to their PTO strategy and trying to find new ways to help their employee community bridge the changes that are affecting their lives.

If PTO donations, leave-sharing, cash-out or one of our other service plans are something that can help your organization navigate through this situation, we are here to help.

Learn more about the PTO Time Bomb and what your organization can do to get ahead of this freight train of surplus PTO.


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Published on Apr 06, 2021 by Gregg Makuch

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