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Updated on January 5, 2024
Voluntary time off (VTO) is unpaid leave that allows employees to balance their work-life demands without losing their employment status. Unlike paid time off, VTO does not affect an employee’s available paid vacation or sick days. Employers often offer VTO to decrease staffing costs and protect against overstaffing.
The landscape of “employee leave” is continuously evolving, with states and local governments increasingly enacting both paid and unpaid leave laws. Consequently, many employers are expanding beyond core paid time off benefits to attract and retain talent, offering both paid and unpaid time off.
Employers provide unpaid time off for various reasons, and voluntary time off may be one of them. In a VTO arrangement, the employer chooses to offer the unpaid time off and the employee opts to take it. This is in contrast to mandatory unpaid time off, such as leave under the Family and Medical Leave Act (FMLA).
VTO often serves two purposes: it helps employees balance their work and personal obligations plus allows employers to reduce staffing costs. For example, in overstaffing situations, employers might ask the extra employees to take VTO.
However, these two purposes aren’t always mutually inclusive. Employers may choose to offer voluntary time off simply to enhance their overall leave package. Here, the employer typically allocates a specific number of VTO hours annually to eligible full-time employees for personal or family needs.
Although they are both abbreviated as VTO, voluntary time off and volunteer time off are not the same thing.
Voluntary time off refers to unpaid leave granted to employees, often as a means to promote work-life balance and reduce staffing costs.
In contrast, volunteer time off is paid leave provided for employees to volunteer with non-profit organizations or community groups, typically limited to one or two days annually. In many cases, companies that are committed to corporate social responsibility offer volunteer time off to encourage employees to give back to their communities. We go into more detail and have tips on creating a policy in our guide to volunteer time off.
Because this benefit is not required by law, employers can be creative when setting up VTO programs. Despite having this freedom, employers should aim for consistent and fair VTO practices. This starts with creating a strong VTO policy
“One of the greatest advantages of taking voluntary time off is that it has no impact on my accrual of paid time off. My available PTO remains intact until I decide to use it.”
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