Unlimited Vacation Days Is a Scam

I remember when I heard about the concept of "unlimited pto puts more pressure on you not to use it." At that time it was something I'd never considered and it seemed smart and right to me.

Fast forward five years and now I have no qualms taking PTO whenever I want. I like unlimited PTO. No one is firing me for taking PTO. I have my own definition of what a reasonable amount of PTO is in a year and I use that definition. If anyone has a problem with how much PTO I take, I'm sure they'll tell me. Personally I prefer being able to interpret the policy in a way that works for me. Better to ask for forgiveness than permission.

"Scam" is perhaps a harsh term, but the article does have a point. When you're told it's unlimited, you know there's a limit, you just don't know what it is. Clearly your boss won't be happy with you taking the next year off. So where between 0 and 365 is it?

What will happen is you end up asking someone else what they take. And you're new, so you don't want to be seen to be taking advantage. Poof, everybody takes minimal vacations, only obviously needed days like when there's an illness or life events.

It varies very widely based on the company you work for.

At the company I'm at, I haven't heard of vacation requests being denied, but I've also only been here for 3 months. I did ask about the policy during the interview process, and they said the CEO has created a culture that encourages people to take the time off they need. They have two "quiet weeks", one between Christmas and New Year's, the other in August, where everyone is forced to take a whole week off, supposedly because they know that otherwise, some people would feel guilty about taking time off. In addition, the first Friday of every month is a "Fresh Air Friday", where they strongly encourage you to walk away from your computer after 1 PM, and regular meetings after 1 PM are not allowed.

Ask me about the policy in a year and I'll tell you how well it's actually been working.

My company has "unlimited" time off and it was a red flag for me before joining. The thing that got me past the red flag was that both founders saw it as their responsibility to set the standard for the amount of holiday taken, and would take significant holidays in order to define the culture.

The thing I've enjoyed most about "unlimited" holiday though is not the length, but the fact that I don't need to differentiate between holidays and sickness. That may sound like an obvious distinction, but it's not. Sometimes I know that for my own (mental) health I need a day off, but I'm not _sick_, it doesn't need to be a specific day, it could be any day in the next week maybe. Justifying it as a sick day would be tricky if there is a distinction made, and taking it as a holiday is a bit unfair on the employee because it's not really about the holiday. Unlimited time off means there is no distinction and you can just do it without thinking about it.

Another thing that improves our approach is that while we don't technically have a minimum (there are guidelines), if someone leaves they are entitled to 4 weeks paid leave in their last year and we make this up in time/salary to ensure leavers don't lose out. Last time I checked we hadn't actually had to pay anyone as all leavers had taken enough holiday.

It takes a lot of discipline to get right, and so it's still a red flag for me, but it's one that can definitely be overcome and can be a strong positive if the company has the right attitude.

Having unlimited vacation, for the first time this year, I'll say I kind of like it for a couple of reasons:

1. At previous jobs I treated the PTO like an asset. When I'd eventually leave the company, that asset would get paid out to me. So I'd be balancing the worth of a week off provided all of the overhead associated (such as coverage plans), with just finding another job in a year and getting a big check for the unused time, and finally taking a real break.

2. It is surprising how much I appreciate simply taking a day off without going into an inane HR system to log '8 hours PTO' and submit for approval or whatever. It makes me feel less like a row on the CFO's cost sheet and more of an autonomous person who's contributions are assumed.

> A study by Namely found that employees with unlimited PTO took an average of 13 vacation days, compared to 15 days for their fixed PTO counterparts. Why would this be?

The article implies that it's from fear of seeming lazy by comparison; there's probably truth to that but also working your life away is simply more cultural in the U.S., and people tend to behave as others do. Which is why we need a better standard for our workers as a country.

The way I’ve seen this work well is for the prospective employee to state their intent (in writing, can even have HR include in the offer letter) before they accept the offer, as in “I will plan to use on average 12 weeks of PTO per year, consistent with your unlimited PTO policy. Everyone is good with that? Great!”

I think calling unlimited vacation days a scam is a bit extreme. It's more like a bad deal and it's worth negotiating against, which is easier said than done by an employee with no bargaining power.

My (previous) employer switched to Unlimited Vacation midway through the COVID pandemic. Many coworkers, including myself, assumed that this was a cost-saving measure to help cover up the fact that employees were not taking their usual vacations during pandemic--largely since they had nowhere to go. The legal stipulation was that you had the existing bucket of legally accrued vacation that you would continue to drain until you ran out, after which you would switch to the "unlimited" pool. Many people rushed to use their time off--I was a little suspicious of it, and continued to ration my time-off as I usually did (which is basically only taking a week off around July 4th and Christmas, to see family).

Sure enough, some months later, a large portion of us were sold-off/laid-off, and I still had about 80 hours of vacation time accrued prior to the switch, which was a decent chunk of change when it paid out. The people that had been riding the "unlimited" days got diddly.

I recently switched jobs, but for a while I was working at Okta, a company that has an unlimited PTO policy. In my experience with it, it was awesome! The teams I was on were great: you were encouraged to take ample time off, work reasonable hours, and keep a healthy work/life balance.

As a manager, I routinely checked-in with everyone who reported up to me to make sure that people were taking breaks as much as possible. It felt nice!

I understand that at some companies with terrible management, Unlimited PTO policies can be a nightmare, but if you have a good culture, it can be a huge benefit for employees to know that they can take frequent breaks, go on long vacations, and have a nice work/life balance.

While I'm a bit skeptical of the study - sample bias can happen (companies with unlimited pto may have younger workers who are taking less vacations to hit career goals) - I've reached the point where I, personally, prefer boring, simple contracts with clearly defined goals, perks, bonus, activities. Yes, those may change and naturally evolve in time, but should evolve to other clearly defined terms. No more stock options and vesting schemes, unlimited PTOs with caveats, etc. I'm fully aware companies will have HR and legal people working to create rules that optimize something that's not in my best interest, so I'll stick to what I can understand and predict.

Anecdotal here, but I have unlimited PTO and I've taken off 5 weeks so far this year. I'll probably take off another 2-3 weeks throughout the holiday season. I might be compensating a little bit for last year since I only took 2 weeks off until Christmas where I took another two to make up for lost PTO - but last year the pandemic was in full swing...

I do make an effort to take off some time every month. I also work really hard and produce a lot of solid work, including mentoring/training others and picking up work from people who have left the team/company. I'm not in a senior role.

Work hard, play hard.

Whether or not you take fewer days off, the actual point of unlimited PTO is that its not an accruable quantified benefit, so that when your employment is terminated (voluntarily or otherwise), you have no claim to compensation for it, whereas quantified accrued vacation must be cashed out (and is therefore carried as a liability on the firms books until used.)

But this is also why you will typically use less with unlimited: if you use too little of accrued PTO, the firm will either:

(1) have a policy with an accrual limit, which will encourage you to to use it or lose it, or

(2) have a must-use policy to limit the liability on their books, ehich will force you to use it, or

(3) take steps (possibly including incentives) to get people to reduce large balances, to limit liability on the books.

And, typically, they’ll have policies encouraging managers to approve requests (and give soft encouragement to take vacation) to people whose balances are approaching the point where the other measures would kick in.

With unlimited PTO, you not using it is a pure benefit for the employer with no cost, so they have no (narrow, short-term balance-sheet optimizing) reason to do anything but encourage it. Plus, in limited PTO situations, the fact of the limits themselves is a factor which encourages managers to be flexible with exercising the “business need” discretion they are generally given over approval in both systems—sure, maybe its a moment you really think Bob would be important, but by taking it now, the balance will be exhausted and you’ve got less chance of him even requesting leave for a while, so you can adjust. With unlimited leave, “business need” is the only constraint, so managers have a lot less reason (even before balance sheet concerns) to be flexible on it.

To the extent there is a broader benefit to the firm of employees taking vacation, management that sees it over the clear immediate costs of people getting paid for not working is rarely a reliable thing across all the relevant layers of management in an organization of any scale. Even if the environment is one where unlimited PTO works well today, there is very little guarantee that will be the case tomorrow.

I think if employers were serious about giving you as much holiday as you need it'd be better to just say "You've got X days of holiday, anything above this must be approved by your manager, but should be fine". That way no one is getting less, but those that want more can take it as long as it is inline with the team's business goals. The underlying subtext of free is always "there's no lower limit and we're hoping you guys average out lower than the previous minimum".

I’d hate to have unlimited PTO because it can mean people try to make a point of taking less than the person at the next desk.

This has a simple fix: have a reasonably high minimum PTO of say 20 or 25 days. That must be a hard minimum as in every employee must take at least that.

Then there is a decent lowest level so if your manager is suddenly the kind of guy that would see PTO as poor performance, then at least no one has to do zero PTO out of fear. When the environment is healthier people can take more PTO, that’s great.

I guess it depends on where you work. I have "unlimited pto" and over the last 5 years I've taken at least a month a year.

Complete scam. Imagine if you had "unlimited pay". Turn up, demand a million bucks, see what happens.

Meanwhile I've been trying to put together a list of companies that do 40+ days' pto and are remote. Hotjar and Todoist are two I've found, but I know there are others. Anyone else have additions?

For my business unit, it's unlimited as long as our customers are happy and taken care of. If you're good at your job and have lucky customers, then it's great. I don't fit that category, so I can take one week off at a time maximum, but a day or two here and there is also fine.

I want the opposite: mandatory PTO.

Every employee gets 4wks minimum. Each quarter, if you have not taken or planned (reserved) any PTO, then PTO is automatically scheduled for you.

Then, during your timeoff, your account is locked out. No fake vacations!

"Unlimited" like cell phone plans. Use too much, and you'll be cut off. No, they won't tell you how much that is.

It more like "unlimited" data throttle, aka deceptive marketing

Naive at best. Manipulative at worst. Scam isn’t accurate