This on-demand PTO cash advance solution, which is now available in eight states, allows employees to access the cash value of PTO as they accrue it rather of waiting until they leave the company, according to a news release from the FinTech startup on Thursday, June 1.
According to Veetahl Eilat-Raichel, the CEO and co-founder of Sorbet, “With rising costs and an impending recession, Sorbet helps employees by unlocking additional compensation that they wouldn’t be able to access otherwise.”
In accordance with the press release, Sorbet examines an employee’s unused PTO funds after receiving an application, distributes the money on a prepaid debit card, and calculates interest at a rate that ranges from 9.99% to 18% (annual percentage rate, or APR).
The statement stated that the employee repays the advance to Sorbet in full after leaving the firm and getting their PTO payout, or after two years, whichever comes first, by making interest-only payments to Sorbet throughout the advance term.
According to the announcement, this option is currently accessible in Colorado, Florida, Illinois, Massachusetts, New York, New Jersey, Texas, and Virginia. It will also be made available in more states this year.
According to the press release, Sorbet’s solution offers low-income workers an option to payday loans, earned wage access solutions, and borrowing against 401(k)s utilized by high-income individuals.
According to the press release, “there is a huge opportunity for the gap in between to be offering a much-needed financial benefit by advancing earned, unused PTO.”
Employees demand more from payroll, including financial wellness perks, according to studies, especially when the cost of living increases and compensation stagnates.