When “Unlimited PTO” Means Zero: NYC’s New Compliance Check Is a Culture Test

New York City employers have long understood that paid time off (PTO) is more than a benefit — it’s a compliance issue, a retention tool, and increasingly, an organizational cultural signaling trust and flexibility.

Now, the city is making that message explicit:

Under a new compliance initiative led by Mayor Zohran Mamdani and the New York City Department of Consumer and Worker Protection (DCWP), businesses may soon face scrutiny if their payroll data shows that fewer than half of employees used any paid time off in the past year.

According to DCWP policy leadership, the threshold will vary by industry and company size, but the intent is clear: unused PTO can be a red flag.

Traditionally, PTO compliance has been about accrual rates, carryover rules, and documentation. This new approach looks at actual usage recorded.

A company with a progressive policy but near-zero utilization may signal a workload pressures that make time off feel unsafe and norms that reward constant availability.

In other words, the city is asking a question many HR leaders have quietly asked for years:If employees have time off but don’t take it… do they really have it?