Unlimited Vacation Encourages Taking More Time Off

My employer implemented an “unlimited vacation” policy this year. As we all know it’s not literally¬†unlimited. I can’t just take off the whole year and still expect to get paid.

Unlimited just means there is no officially stated maximum. It’s sort of like the “no pre-set spending limit” on some credit cards. There is a limit. You just don’t know it. Unlimited also means there is no officially stated minimum number of vacation days you are entitled to. Whether it’s half full or half empty is in the eyes of the beholder.

In a way it encourages employees to take vacation. If you don’t take enough days off this year you won’t have any days rolled over to the next year. If you don’t take enough days, when you leave your employer you won’t get paid for any days you didn’t take. So you might as well take them.

On the other hand, employees may be afraid that taking time off makes them look bad. They can’t just point to their accrued vacation days and say those are their days to take.

I’m taking the former approach. I’m tracking the days I take. I make sure I take the same number of days allowed by the old policy. I don’t short-change the company by taking more days. Neither do I short-change myself by taking fewer days. I will end up taking more days than I used to (not banking days anymore).

Has your company moved to unlimited vacation? How would you deal with it if it does?

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  1. Julia says

    My company has also implemented unlimited vacation time. Our manager said that 5 weeks off is acceptable. If we go over 5 weeks, it will probably be still okay, but working remotely for an hour or two would probably be required at the end of the day to ensure no work is left behind. Last year I took 4 weeks off completely and spent them overseas plus 1 week during Christmas and 1 week in the beginning of the year. So 6 weeks total and I didn’t feel guilty about it.

  2. Thias @It Pays Dividends says

    When I was in public accounting, my department had an “unlimited” vacation policy – but you could only use it during certain months (mainly June, September, October and part of December). I normally took my regular vacation and then an extra week during Christmas just because the department shut down for it. I may have taken more if I had my flexibility, but given the small time window, it would be hard to take a lot more than I was.

  3. ELG says

    And there is usually an asterisk (either explicit or implied) that you are expected to be available to some degree during your “time off” and you are still expected to meet deadlines.
    That combined with the previously mentioned observation that people take less time off makes this a total scam policy for employers.

  4. milen says

    My company (a technology company) has the “unlimited” vacation policy. It would be more accurate to call it “unstated”. In 1:1 meetings, my managers have always said you are expected to take no more than 3 weeks, which was everyone had before in a work year. No one really takes more vacation time because managers provide unequivocal guidance verbally in 1:1 meetings. Word is that this helps the company with accounting, as employee can no longer accrue due pay for unused vacation time. It helps the bottom line, and it makes the company look more generous. For the employee, it is actually worse in my opinion, because you can no longer point to a policy that is applied to everyone. Now taking vacation comes down to negotation and host of circumstances none of which are in the open. I personally don’t like it.

  5. lynneny says

    I guess that means employees can no longer accrue and be paid for unused vacation time?

    My employer does PTO days (so includes vacation + sick days, so if you get sick a lot you have much less vacation time, and vice versa). The number of PTO days increases every few years of employment to a maximum after 15 years of 30 days, but is about half that for people with the company less than 10 years. It’s a use-it-or-lose-it system, and I lose a few untaken PTO days at the end of each year because I always save a few in case I get sick in December. By the time the end of December rolls around and I’m still healthy, it’s too late to take the remaining PTO days as vacation time and I lose it.

    Very unlikely our company’s PTO system will change.

  6. M2M says

    I would recommend using Harry’s approach for new “Unlimited PTO” plans (same PTO hrs used was standard for your company in prior year ). This eliminates any potential conflicts with peers and supervisors on this topic. From the corporate perspective, the company’s Balance Sheet is in much better shape with Zero “Compensated Absences” liability using Unlimited PTO.

  7. JMCSF says

    My last employer switched to unlimited vacation. It was a small non-profit with an eccentric Executive Director. Unfortunately, the Executive Director started making passive aggressive comments to the staff when somebody was out on vacation such as, “wow so and so is still on vacation?” Of course the Executive Director knew they were on vacation, she approved it in the first place.

    The switch to “unlimited” vacation days was sold as a change for accounting purposes. My understanding was that if an individual quit they would have to be paid out the cash value of their vacation days and the company had to have that value set aside at all times. While employees were told they would, in practice, still be able to take the same amount of vacation, the reality is that the Executive created an atmosphere where employees were scared to request time off. Ultimately this was a very counter productive move and I am happy to no longer work there.

  8. smh says

    Pay and benefits are based on supply & demand of labor. In most fields at the current time, supply exceeds demand, so the employer has the upper hand. Any employer moving to “unlimited vacation” is doing so for their own benefit, and to the detriment of their employees. Any argument that this is for the benefit of employees is a con job. Once supply starts to move closer to demand, I can assure you these gimmicks will disappear. We can only hope this happens sooner rather than later.

  9. GTS says

    Most companies I have worked with (tech startups) have this policy as a norm.

    Interestingly, in general I am taking less vacations where I am completely off the grid, meaning I am still answering emails and occasional calls. I may take 1 week completely off the grid and scatter in some random Mondays and Fridays.

    As the work force continues to evolve and become more mobile, I think we will start to get more data on how these policies affect productivity and employee wellness.

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