PTO Buyback Question


My boss has tasked me with looking into a one time pto buy back offer for employees who have accrued a massive amount of pto that they will never be able to use. She is not interested in changing the current rollover structure and was clear she only wants to do this once due to the massive accruals not being an issue before COVID when folks stopped traveling for a time.

We are a remote team, so there are multiple states where ees are located, and we do not participate in a 125 plan. My question surrounds the logistics to consider. I feel like there is a huge possibility of running into hidden issues (tax, state law changes, etc.) during or after implementation.

Has anyone else done something similar and what advice can you offer?  Thank you for any insight! 

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  • Sarah,

    We didn’t have a one-time buyback but rather a clause in our PTO policy that allowed employees to cash out one (1) week per year.  Everyone loved the option, including management, as it also lowered the liability carried on the books.  We operate in multiple states including some where vacation can’t be lost or converted so I understand your concerns.  Most likely would be treated as a bonus and taxed accordingly.  Feel free to reach out if you have questions or want to set up a time to chat.

    Phil Brunner

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