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General Discussion / Re: Random Stuff Part III
« on: September 26, 2017, 07:24:03 pm »It's not that the company wants you to take personal time. It's that employees having the hours banked is a liability, and the CFO would be happier if that liability were smaller.
I believe you, but I don't know why this would be. Could you explain?
Warning: I've had a little bit of finance training, but I'm not an accountant.
When you accrue PTO, the company accrues a liability equal to the equivalent of your wages for the time you're entitled to. (Examples: http://smallbusiness.chron.com/book-paid-time-off-accounting-32807.html, https://www.proformative.com/questions/accounting-for-pto ; googling for "accounting PTO" will turn up more). To my understanding, this is true even if your PTO can't be "paid out" as cash when you leave. So if lots of employees have 80 hours of personal time banked up, this shows up as a large liability. The only way to reduce it is to have employees take the time off, thus, the rule requiring that employees can't save as much.
Kirian's point about the risk of having all the employees take time off at the same time is interesting and possibly relevant, but as you point out, it can be mitigated by policy. But that policy doesn't change the accounting rules, which require that the liability be recorded. That's why I conjectured that the CFO, in particular, is the officer who'd care.