American workers forfeit between $85 billion and $95 billion in earned paid time off every year, according to a new analysis published by HR Daily Advisor. The average employee gives up roughly $3,000 in unused PTO before December 31 — a loss driven largely by "use it or lose it" policies that force workers to schedule time off or watch it disappear.

The same analysis puts employer balance-sheet exposure at more than $760 billion in states that require payout of unused PTO at separation. With a 2025 FlexJobs survey showing nearly a quarter of American workers took zero paid days off in the previous year, HR leaders are confronting a paradox: a benefit designed to relieve stress is making it worse.

What's driving the under-use?

A 2025 FlexJobs survey found that almost 25% of American workers did not take a single day off over the preceding year. Among employees who did take time off, only 35% took more than two weeks, according to HR Daily Advisor.

Gallup's latest State of the Global Workplace report shows 40% of U.S. employees feel stress for a lot of the day. Some 55% report feelings of burnout at work. Those numbers collide with a Harris Poll finding that 85% of employees agree: "America has a culture that glorifies being busy."

Pew Research identifies the self-imposed barriers behind low PTO usage. Workers skip time off because they fear falling behind, burdening colleagues, missing promotion opportunities, or losing their jobs. A significant majority also report feeling pressure to respond to work messages outside regular hours.

How does U.S. time off compare globally?

Americans take an average of 12 paid days off per year, according to the Harris analysis. Workers in France take 31 days, Germans take 29, and UK employees take 27. That gap of roughly two to three weeks puts U.S. employers at a structural disadvantage on retention and well-being benchmarks.

Is unlimited PTO the answer?

Some companies have turned to unlimited PTO to resolve the cliff. The data suggests the opposite effect. Workers treat "unlimited" as a soft cap, fearing judgment if they take more than peers. Under such plans, employees often take less time, not more.

The result is what HR Daily Advisor calls the "year-end PTO cliff": a last-quarter scramble to schedule time off before the December 31 cutoff, followed by forfeitures, growing balance-sheet liabilities, or stress-filled vacations workers never wanted.

What can HR teams do instead?

HR leaders can replace the cliff with flexibility. Rather than requiring employees to use PTO or lose it, organizations can let workers allocate the value of unused time toward 401(k) contributions, HSAs, 529 accounts, student loan payments, or cash payouts.

A recent Morgan Stanley survey found that 85% of employees would be more likely to stay at companies offering financial benefits tailored to their specific needs. That retention signal matters because burnout continues to drive voluntary turnover across industries.

HR teams should also engage workers directly about the reasons they avoid PTO — workload anxiety, coverage gaps, promotion worries — and design policies that address those root causes rather than defaulting to forfeiture. The piece urges HR to discard restrictive use-it-or-lose-it policies and look past unlimited PTO as a gimmick.

The year-end deadline arrives in roughly 90 days. Whether HR treats it as a compliance exercise or a redesign opportunity will determine whether the $760 billion liability grows, shrinks, or stays where it is.