Vacations give employees an opportunity to take a break from their daily lives while reducing stress and improving their overall mood in the process. Yet many employees don’t take a vacation. According to Pew Research Center, only 48% of workers use all their vacation days. For companies, the importance of employees taking vacation is paramount to keeping them happy. 


Oxford University released a study that showed happy workers are 13% more productive. Plus, when employees use vacation, they come back to work more motivated and inspired, preventing burnout and reducing turnover rates. This can give construction companies an edge as finding skilled workers is currently a challenge. AGC’s 2023 Workforce Survey Analysis shows 85% of construction companies surveyed have open positions for craft workers or those workers with specialized skills. And retaining the skilled workers you have costs considerably less than trying to hire new employees. It can cost anywhere from $2,000 to $4,000 to hire a new employee, according to LinkedIn. 

While increased productivity and improved retention offer huge financial benefits for companies, there are other reasons to encourage employees to use up their PTO; it makes it easier for HR and payroll to do their jobs. 

Why Do Companies Want Employees to Use PTO? 

When the end of the year is near, HR teams need to see who has used their PTO and who hasn’t. Some companies will allow employees to rollover PTO to the new year, others choose to pay employees for their unused PTO – which could seriously affect cash flow. 

There is no nationwide statute regarding PTO. The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. Instead, the Department of Labor (DOL) allows individual states and employers to decide employees’ PTO benefits.  

There are 24 states with existing PTO payout laws or statutes regarding the payment of PTO accrual. The states include: Alaska, Arizona, California, Colorado, Illinois, Indiana, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Minnesota, Nebraska, New Hampshire, New York, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, Rhode Island, Tennessee, West Virginia, and Wyoming—and the District of Columbia. It’s important to note that most laws are dictated by existing company PTO policies. 

Staying on top of every employee’s PTO is just as important as employees taking vacation.  

Managing PTO Becomes Easier When You Use Tools That Can Track It 

Understanding the importance of employees taking vacation leaves companies with a healthier workforce. Beyond encouraging vacation and leading by example by taking your own time off, tracking and communicating PTO accrual to employees can help ensure they use what they’ve earned. 

A time off tracking system can help keep everyone on the same page; employees know how much PTO they can take and when and employers stay on top of who needs to take a break or how much will roll over or be paid out next year.  

Some companies rely on simple time tracking with a Google Sheet, shared calendars or a whiteboard. However, a good HR system and time tracking app can give you more visibility and help employees stay on top of hours worked and PTO accrued. These HR tools can also send automated alerts to employees who could lose PTO if they don’t use it. If you use a rolling PTO system, make sure employees are aware if they are near the maximum hours.  

Using tools like ExakTime’s time clock app lets you track when your employees work including the number of hours accrued.   

ExakTime Combines Time Tracking and Time-Off Management 

ExakTime’s mobile time tracking app not only tracks the hours your employees work but can also track their PTO. With ExakTime: 

  • Employees can see their available hours and make their time off requests. They can also add notes about the requested time. 
  • The manager or supervisor receives a notification about a pending request and can easily review and approve (or deny) time off. 
  • The employee automatically receives a notification with approval or denial. 

With functionality that’s flexible, users can easily and quickly enter and customize their time-off plans to meet their specific needs. Users can determine the type of time, like vacation or sick time, how it accrues and time-off bands based on years of service. ExakTime automatically calculates and updates the available time off based on accrual plan rules and time taken.  

And with the at-a-glance dashboard, supervisors can see all approved, pending and denied requests along with employees’ available and used time off. And employees can see and use their PTO with just a tap. Since ExakTime integrates with over 100 payroll providers, you can ensure your time off data is accurate and reflected in your payroll.  

Learn more about tracking PTO with ExakTime by scheduling a demo. 

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