What Is Voluntary Time Off? Definition, Examples & Guide

What Is Voluntary Time Off (VTO)?

What does voluntary time off mean? VTO is unpaid leave that employers offer during slow business periods, allowing team members to voluntarily leave work early or take full days off without using paid time off. Unlike mandatory cuts, VTO is optional—workers choose whether to accept based on their financial needs and personal priorities.

Quick Answer

VTO is unpaid time off offered (not required) by employers during slow periods. Workers can accept or decline to leave early or skip shifts without using PTO, reducing labor costs while maintaining flexibility.

VTO is employer-initiated based on business needs, contrasting with PTO which employees request and control. According to the Society for Human Resource Management, VTO policies are increasingly common in industries with variable demand like retail, warehousing, customer service, and manufacturing—sectors where work volume fluctuates unpredictably.

How Voluntary Time Off Works

Typical VTO Process

1. Employer Identifies Low Demand: Management recognizes that current staffing exceeds actual work volume for the shift or day.

2. VTO Offer: Supervisors announce VTO availability to the team, specifying how many workers can leave and for how long (rest of shift, full day, etc.).

3. Voluntary Acceptance: Team members decide whether to accept or decline VTO based on their personal needs and financial situation.

4. Selection Process: If more workers want VTO than positions available, employers select based on seniority, performance, fairness rotation, or first-come-first-served.

5. Workers Leave: Those accepting VTO clock out and leave without pay for missed hours. Remaining team members continue working.

Common VTO Scenarios

• Warehouse offers VTO when order volume drops below forecast
• Retail store sends team members home early on slow sales days
• Call center reduces staffing when incoming call volume is light
• Manufacturing plant offers VTO during equipment maintenance downtime
• Restaurant sends servers home early when fewer customers arrive than expected

VTO vs PTO vs Unpaid Leave

VTO is employer-initiated to reduce costs during slow periods. PTO is employee-initiated to use earned paid time off. Unpaid leave is typically employee-requested time off without pay when PTO is exhausted.

When Do Employers Typically Offer VTO?

Seasonal Slowdowns: Post-holiday retail lulls, off-season hospitality periods, or cyclical manufacturing downturns.

Overstaffing: More workers scheduled than current work volume requires.

Low Customer Demand: Slower-than-expected traffic, sales, or service requests for the shift.

Inventory Gaps: Warehouses and distribution centers between major shipment cycles.

Equipment Downtime: Maintenance, repairs, or material shortages temporarily reduce production needs.

Weather Events: Severe weather reduces customer traffic or creates unsafe conditions.

Budget Management: Approaching labor budget limits and needing to control costs before period end.

Advantages of VTO

For Employees

Flexible Personal Time: Attend appointments or handle errands without using accrued PTO.

Preserve PTO: Save paid time off for planned vacations, sick days, or emergencies.

No Penalty: Voluntary nature means no negative consequences for accepting or declining.

Reduced Burnout: Occasional breaks during slow periods prevent fatigue and improve job satisfaction.

For Employers

Labor Cost Control: Reduce payroll expenses during low-demand periods, improving profitability.

Budget Flexibility: React quickly to demand fluctuations without layoffs or mandatory reductions.

Employee Goodwill: Fair VTO offerings show trust and flexibility, improving morale.

Workforce Retention: Flexible policies help retain team members who value work-life balance.

Disadvantages of VTO

For Employees

Income Loss: Unpaid time off reduces paychecks, creating financial hardship.

Inconsistent Hours: Frequent VTO creates unpredictable income and makes budgeting difficult.

Pressure to Accept: Workers may feel pressured to accept VTO to appear cooperative.

Reduced Benefits: Fewer worked hours may affect benefits eligibility or retirement contributions.

For Employers

Potential Understaffing: Too many acceptances can leave shifts short-handed during unexpected demand surges.

Morale Risks: Frequent VTO may signal instability, worrying team members about job security.

Legal Risks: Mishandling VTO (making it mandatory or discriminatory selection) creates liability.

Legal Considerations for VTO

Must Be Truly Voluntary

VTO must be optional. Forcing team members to take unpaid time off is a reduction in hours or furlough with different legal implications, including potential unemployment insurance eligibility and WARN Act requirements for mass layoffs (100+ workers).

Fair Labor Standards Act (FLSA)

Non-Exempt Employees: Can accept VTO freely. Employers are not required to pay for hours not worked.

Exempt Employees: Salaried exempt workers generally cannot take partial-day VTO without losing exempt status. Full-day VTO is permissible but complex.

State-Specific Rules

Some states have additional requirements:

• California: Reporting time pay rules may require minimum payment if workers are sent home early
• New York: Call-in pay rules require minimum hours payment in certain industries
• Massachusetts: Reporting pay laws mandate minimum payment for scheduled shifts

Discrimination and Fairness

VTO selection must be non-discriminatory. Use objective, transparent selection criteria to avoid claims based on protected characteristics.

Best Practices for Implementing VTO

Create Clear Written Policies

Document VTO procedures in employee handbooks covering:

• How VTO will be offered (announcement method, timing)
• Selection criteria when demand exceeds volunteers
• Whether VTO is available to all team members or specific roles
• Any limits on VTO frequency or duration

Use Transparent Selection Criteria

Establish fair, objective methods:

• Seniority: Longest-tenured workers get first choice
• Rotation: Distribute VTO opportunities evenly over time
• First-come-first-served: Those who respond fastest
• Performance-based: Top performers get priority

Communicate Clearly

Announce VTO availability with sufficient notice. Specify how many positions are available, how long VTO lasts, deadline for responding, and selection method if more volunteers than openings.

Track and Document

Maintain records showing when VTO was offered, who was offered, who accepted or declined, and selection rationale. Documentation protects against claims of unfair treatment.

Balance Business and Team Member Needs

Avoid over-reliance on VTO that creates income instability. Consider alternatives like PRN or on-call staffing for variable demand, cross-training to shift workers between departments, or more accurate demand forecasting to improve scheduling.

Is VTO Right for Your Business?

✅ VTO Works Well When:

• Business demand fluctuates unpredictably week-to-week
• You need cost control without permanent headcount reductions
• Workers value occasional flexibility for personal needs
• Clear, fair selection criteria are established
• VTO is offered occasionally, not constantly

⚠️ VTO May Create Problems When:

• Frequent VTO signals business instability to workers
• Income unpredictability causes team members financial hardship
• Selection feels arbitrary or discriminatory
• Better demand forecasting could reduce the need
• Workers feel pressured to accept despite needing income

VTO in Different Industries

Retail: Post-holiday slowdowns and mid-week lulls when customer traffic drops.

Warehousing and Logistics: Between peak shipping cycles when order volume is below forecasts.

Customer Service: Call centers when incoming volume is lighter than scheduled capacity.

Manufacturing: Equipment downtime, material shortages, or seasonal production lulls.

Healthcare: Administrative or support roles during low census periods.

Hospitality: Restaurants and hotels when customer traffic is lighter than expected.

The Bottom Line

Voluntary time off (VTO) is unpaid leave that employers offer during low-demand periods, allowing workers to leave early or skip shifts without using paid time off. VTO helps control labor costs while giving team members flexibility for personal needs.

For VTO to work effectively, it must be truly voluntary, offered fairly, and balanced with workers’ need for stable income. Clear policies and transparent communication are essential. Alternatives like PRN staffing or better demand forecasting can reduce over-reliance on VTO.

ShiftFlow’s workforce management platform can help you manage VTO and flexible scheduling more easily with automated scheduling and real-time communication tools.

Sources

• U.S. Department of Labor – Fair Labor Standards Act (FLSA)
• Society for Human Resource Management – VTO Best Practices
• State labor departments – California, New York, and Massachusetts reporting time and call-in pay regulations

Further Reading

• PRN Employee Guide – On-call staffing alternatives
• 1st Shift Schedule – Standard shift patterns
• Double Shift Guide – Extended work periods

Frequently Asked Questions

What does voluntary time off (VTO) mean?

Voluntary time off is unpaid leave that employers offer during slow business periods, allowing team members to voluntarily leave early or take full days off without using paid time off.

What is the difference between VTO and PTO?

VTO is unpaid time off offered by employers during slow periods that workers can accept or decline. PTO is paid time off earned by employees that they request and use at their discretion.

Is voluntary time off paid or unpaid?

Voluntary time off is unpaid. Employees who accept VTO do not receive wages for the hours they don’t work.

Can employers force you to take VTO?

No, VTO is voluntary by definition. If employers mandate time off, it becomes a layoff, furlough, or reduction in hours with different legal implications.

When do employers offer VTO?

Employers offer VTO during low business demand such as slow seasons, overstaffed shifts, reduced customer volume, inventory lulls, or equipment downtime.

Does VTO affect unemployment benefits?

Generally no, since VTO is voluntary. However, if VTO is offered so frequently that it significantly reduces hours and income, workers may qualify for partial unemployment in some states.