Unlimited Paid Time Off: Too Good to Be True?

For the average working stiff, the idea of taking as many paid vacation days as you want sounds like a dream. Who wouldn’t want to take more time off from the daily grind?

Over the last few years, a growing number of companies are offering exactly that to their employees: a policy of unlimited paid days off. And to those who find themselves carefully planning use of their limited paid vacation days (that never seem to be enough), the ability to take more time off likely seems very attractive indeed.

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So it might come as a surprise that that reviews of unlimited PTO from the rank and file are not all raves. Some report feeling pressured by management to not take advantage of the policy, and unlimited PTO means that companies are not bound to pay workers for the vacation time they did not take. Companies with traditional PTO policies who try to switch to unlimited have gotten pushback from workers, particularly senior employees who have earned more vacation time than their shorter-term colleagues. And some believe that the policy is more about getting the financial liability of PTO off a company’s books than it is about encouraging a healthy work-life balance.

Chicago software engineer Eric Mathiasen, who previously worked for a company with unlimited PTO, puts it this way: “It takes a company who have strongly ethical leadership with integrity for the policy to even approach equitable benefit to both employer and employee. Most companies are generally ethical, but it doesn’t take much to sway the balance in favor of the company.”

John Challenger, CEO of outplacement firm Challenger, Gray & Christmas, agrees that companies can benefit financially from unlimited PTO policies. “They eliminate accrued day-off payouts, so it saves money. They’re typically easier for HR departments to administer than traditional policies,” he said.

Challenger also says that the obvious benefit – more time to pursue life outside of work – is a real one. “They allow workers to have time for major life events, like weddings or dream vacations, leading to a happier workforce. Many companies offered this perk because their workers, especially in the C-suite, were not taking any time off, perhaps because they didn’t want to seem as if they weren’t working as hard as their colleagues or wanted to appear dedicated to the company. However, and ironically, many workers do not take time off with unlimited PTO policies either, as they do not want to appear to be taking advantage of the company’s generosity.”

(StartupStockPhotos / Pixabay)(StartupStockPhotos / Pixabay)

Jennifer Meza, vice president of people at Chicago human resources software company Yello, says unlimited PTO is a standard benefit in the tech sector. “Part of it is definitely that [tech] is project-based, and part of it is that it’s so collaborative by nature of the work. It’s easier to have people work remotely, it’s easier for people pick up and trade back and forth on covering for something. It doesn’t work in every environment. It would never work in retail where you need bodies on the floor and need to schedule and plan for it.”

Parking technology company SpotHero‘s Vice President of People Tiffany Voltz says that the policy helps attract and retain talent. “Our employees love the policy. It’s the perfect illustration of trust between employees and management and that is empowering for our employees. Being trusted to get your job done while taking the time to live your fullest life outside of work as well is a powerful benefit.”

Carly Slovenec, a support specialist with Chicago educational tech company eSpark Learning, has had unlimited PTO for nearly a year in her first job out of college, and she says so far, so good. “I have probably taken more time off than I might have with limited days. Now when considering future employment, I don’t know if I’d want to work somewhere that gave a limited number of days off.”

Slovenec believes that the culture of mutual trust makes the policy work at eSpark. “My manager knows that I am not going to take advantage of the policy, and I know that my manager is going to happily accommodate my requests for time off. I work in education, so we are super busy in fall during back-to-school season. At this time, there’s an expectation that we’re not going to take time off unless absolutely necessary, but throughout the rest of the year, I have the freedom to travel and take days off without strictly counting and budgeting my days.”

Yello’s Meza says that open communication from the top is crucial to developing that kind of culture. “You have to have a strong and dedicated management team that talks to their employees about finding the right balance and about not just getting their work done but also taking care of themselves,” she said.

SpotHero’s Voltz also puts the onus on management to make the policy work, but in a more visible way: “The biggest way to set the tone is by managers being good role models and taking time when needed.”

But Mathiasen cautions that eSpark’s welcoming culture regarding vacation is not universal. “At only the worst companies would management openly frown on [taking vacation]. They at least pay lip service to the idea it’s a good thing. But then they may schedule a lot of projects where vacation is not approved because of the ‘importance’ of the project. When that happens more than once a year it starts to look like a strategy related to PTO instead of legitimate corporate needs.”

Challenger also notes that when nebulous rules on paid time off cross paths with medical or parental leave laws, things can get complicated. “Companies need to be very clear with how unlimited PTO is to be used. If they don’t, workers may use their unlimited time for things like medical leave or maternity leave, making mandatory unpaid leave provided by FMLA or ADA to become paid. If that is not the intention of the company – to allow workers to take medical or paternal leave using their unlimited PTO – they need to communicate clear guidelines for its use.”

Ultimately, Mathiasen advises careful vetting before accepting an offer from a company offering unlimited PTO. “I’d recommend trying to ask employees about culture related to vacation outside of the interview process, such as contacting other employees through LinkedIn. Directly ask managers during the interview and watch their body language as they reply. Ask yourself what your plan is if you work there and the worst case in relation to PTO happens. Have a strategy going in so you don’t feel blindsided if it’s not what you expected.”

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