Ask HN: What is your opinion of “unlimited” PTO?
With Microsoft moving away from formal PTO tracking to DTO (discretionary time off), so I was wondering what others have experienced and think of working at a company without formal time off tracking.
I have someone who we lured to the team by offering 4 weeks off in the first 2 months of his employment so he could do a pre-planned trip. Didn't require any special approvals because it's just an SOP.
I have someone who regularly takes 2-3 days off every month, because he works in concentrated bursts of energy, then needs to decompress.
And of course, I have one person who NEVER takes time off, because they always have so much to do and are afraid to let a ball drop. This leads to overwhelm, and a ball drops anyhow. So I need to force them to take time off.
As with all things, it's not just the mechanism, but the environment that mechanism exists within. It needs to be deployed alongside strong accountability mechanisms - planning, goaling, 1:1s, team health assessments, and performance reviews - otherwise it can be abused, or it can be hard to say 'no' to a request, or it can be hard to know when people aren't taking time they need.
But if you've done that, it's an incredible tool.
Sounds perfect.
Managers are as accountable as their staff, if not more.
Managers eject from the seat even quicker and for problems oftentimes in no ways caused by them.
They have to deal with people only honouring their own wishes, with policies that would never be a fit. They came up with their own: take all the time you want. All the way you want. I will make sure to fire you if you aren't providing value rather than chase your hours and time taken off.
Note: I'm not a manager. will never be one. I simply have a bit of compassion for their job: they are tasked to make other people get the work done.
Hypothetically, what if this individual was taking 12 weeks PTO and were underperforming? Would your business encourage them to take less leave next year to perform better? How much leave would be 'too much' for them to get back on track?
The thing is all of that requires a lot of trust in both directions, as you pretty much said. If I am a candidate for your company, how do I know that trust is there?
Recently I interviewed for a company which had unlimited PTO. They marketted this to me as some fantastic perk, and then when I got the contract they had a clause which said that they ask people to only take 'reasonable' amounts of time off. I asked them to define what is 'reasonable' and they could not. At that point, all of my red flags were waving and I walked away.
1. How to actually manage people.
Snarky I admit, but in 2023 this is a true statement for a lot of people.
The point is that good tools in the hand of bad managers can be used for oppressive behavior and not as a means of reward. This is one of them.
"Unlimited PTO" is PR-style spin on the loss of that compensation; you're being fleeced by your employer.
When you leave a company with PTO where you worked your ass off and never took any vacation, you're cut a check for that unused PTO.
When you leave a company with "unlimited PTO" after doing the same, you get nothing.
Edit: according to some comments, this is state-specific. The above applies to CA.
This is objectively false for most of the United States. Plenty of states do not require this, and plenty more have loopholes that allow employers to avoid paying out PTO if specified in the employment agreement.
It's also the case that PTO is always capped. So you are forced to use it, meaning the maximum amount you could be paid out is a fairly small fixed amount. Unused PTO above the cap is literally wasted, and used PTO is already part of your salary.
I think I'd get paid for unused PTO if I quit or was fired, but I couldn't accumulate more than something like 5 weeks worth.
I'd love to work for a company that had both unlimited and required PTO. If you don't take enough days off for say six months, they force you to take a week or two off.
No one I have ever heard of gets cut a check for unused time et the end of the year. It's when you leave (for any reason) in most states you are supposed to be paid out for it. Not true for unlimited PTO.
About 2 years later, they decided to flip us to 'unlimited PTO' and put that typical HR BS spin on it.
That was the last straw for me, after a couple other little 'f u' changes (once a year 401k match, for example). Cashed out my PTO and went elsewhere.
A few years in, executives abruptly told everyone they were switching to "unlimited PTO" and everyone's accrued PTO would be erased "since it's no longer necessary, take as much vacation as you want."
Sales/marketing depts celebrated.
My team in engineering flipped out since none of us had ever used any PTO, and knew there were some sizable checks waiting for our exit. I ended up telling leadership if they pull this erasing shit, which is probably illegal, I quit immediately and will be in tomorrow to interview and renegotiate compensation if they like. Everyone received checks for their unused PTO that week.
They still switched to unlimited PTO, which us in engineering never really got to use. In a startup it's a race against the runway running out while you're still building the plane, nobody has time for PTO, and they knew this.
It also prevents everyone taking off at the end of the year. They didn’t stockpile vacation because they didn’t need to acrue it.
Only 5 states require this. Most states allow companies to choose what to do with unused PTO, and many, (surprise!) choose not to pay it out.
Between the protection of owning inventions created on your own time, and getting paid for unused PTO, my state (CA) sounds pretty great for a tech person working in startups.
Most people in startups are massively hurt by compensation laws regard stock and the crazy price of housing. If you in SF it’s worse as the most anti-child city
Only in that HN users form a tiny minority of the general workforce.
I wouldn't say it helps a tiny minority of "hackers", invention ownership protections benefits all hackers.
The benefit of unlimited PTO (FTO) is only a benefit if you take it.
I've had FTO for the last five years and I will never go back to 15/20 days of PTO.
In most cases it is dependent on the managers approval as well so it rarely ever (again, anecdotally based on my experiences) results in more PTO that you would have had and often results in less.
It also creates a bit of a situation internally where people feel guilty or are shamed (sometimes even by other peers not managers) for using too much.
On the flip side, at least you don't have that "I don't want to use my PTO incase there is an emergency" and "I'll go in sick to avoid using a sick day" effect.
On this note though...
> of working at a company without formal time off tracking.
No company doesn't have formal tracking. They are most certainly tracking it closely. There just isn't a defined ceiling in the system.
Disclaimer: I'm a bit biased since it bit me. My employer switched to unlimited PTO without warning and previously had all the vacation days accrue on Jan 1st (and no carry-over) so literally if I left Dec 31st I would have gotten paid out 4 weeks (since I barely took any time off this year) but I left after the policy took effect so I didn't get paid anything. So I'm a bit bitter.
It worked, more people took time off and there was less burnout+turnover.
The open-ended nature of “unlimited” makes me think it really means “guilt-based” time off, skewing to less time than I might take if it was included in a contract.
Have only recently started considering employed work again after many years of freelance and contract work and it’s made me really cold on the idea simply because it smells of more of the bullquick I wanted to get away from in the first place.
This is exactly my experience. The last company I worked for with unlimited PTO did everything to prevent folks from using it.
It's one of many negative signals I look for. I interviewed at a firm once that was proud that their cafeteria offered "free breakfast, lunch, and dinner", which sounded great until you realized they expected all employees would be working there through breakfast, lunch, and dinner.
I should note that I'm definitely right-of-the-bell-curve on this. I very intentionally decided to enjoy the perk. My employer was cool about it, but I suspect it's because my productivity is also above average.
I should also mention that I think this long vacation time does wonders for my productivity on the job, and that most Americans I've encountered under-estimate both the extent to which disconnecting from work is important, and how long it takes to truly disconnect.
In sum, I think unlimited PTO can be an incredible perk, but you have to pay very careful attention to the company culture, and be prepared to leave if it's not what you expected.
With traditional PTO accrual, employees get a payout of all unused PTO when they leave the company. It's expensive for the employer, and they also have to carry all of that PTO on their balance-sheet as a liability.
Under unlimited PTO, most employees take the same amount of vacation as they do under traditional PTO. So no difference there. But when the employee leaves, the employer doesn't have to pay out the remaining PTO balance.
Also: it's only unlimited until it isn't. You can hit invisible/unofficial limits without knowing it.
* you can take enough time off by yourself, and
* your team is doing the same/is not resentful, and
* your signifiant other is also ok with it
then it's pretty great.
Kids ill? Day off. Have a big trip planned to far away? You can now stay longer, and don't need to sacrifice e.g. Thanksgiving or Christmas. Moving house? Days off. Etc.
Anecdotally, productivity is up on teams I've been on with DTO. Everyone is just more rested, relaxed, and ready.
PTO is one of those things where, to misuse the quote, 'good fences make good neighbors.' A reasonable set of requirements and limits can reduce the guesswork, preserve relationships, and make it so people actually use their PTO.
It puts the discussion of time off between a person and their manager. This can be good for those that have a good working professional relationship with their good professional manager. This can be contentious for people that barely get along with their manager and some people may end up never taking time off leading to a build up of stress, burn-out, risk of people snapping and potentially ending up in the news. I believe that could be a financial liability as well.
My manager kept saying I could take time off whenever I wanted to, but the hurried pace of the team left me feeling like that wasn't really true.
And it's obvious there are limits in there somewhere. I probably couldn't take off every Friday, or take off a week every month. Where's the line? The uncertainty is what killed me.
Leveraging unlimited PTO confidently requires being adept at understanding the social situation around you - how will your team and manager feel if you keep requesting more and more time off?
I wound up taking as little time as I could because I couldn't tell what I was entitled to. I took my cue of what I could do from the people around me, and they weren't taking PTO very often.
I felt better in workplaces where the PTO rules are clear. It makes me feel entitled to take a given amount of time off, and gives me the confidence to request what I need without worrying about whether it's within the unspecified bounds of appropriateness.
There's also the scam of not having to pay people who leave the company for their unused PTO.
Personally, I refuse to take jobs without a set amount of PTO, unless there is some other huge benefit to make up for that. During negotiations I press hard for as much guaranteed PTO as I can. Currently working 4-days a week. That's a lot better than some vague promise of no limits.
Defined PTO is easy to turn into "use it or lose it" which effectively forces people to take time off, which is a major issue in the US - people need to take their allotted time! The best system would be one where once you hit "lose it" you start getting cash instead, but that would cause other weird incentives.
You then have managers that are flexible with your defined PTO, and let you "go negative" a certain amount. As long as people don't abuse it, it works well. Some companies "dump" your year's allotment of PTO on Jan 1 so you can work it down instead, same idea.
If employees were actually utilizing unlimited DTO the company would switch back to accrued PTO. I've seen this happen with an explicit claim that employees were "abusing" the generosity of the company. Said company later switched back to DTO to force employees a few years later to burn down their accrued PTO balances.
What it means to me: - Teams and expectations are oriented such that randomly needing to do things during the day is fine
- You don't ask to take PTO. You inform people when you will be unavailable. With some notice. But there's no approval process.
I haven't seen people abuse this; it's not like people take 8 weeks off randomly in the middle of a release. I guess they could.
In our case, it worked exactly like PTO anywhere else. We still had to request long stretches of time off (say more than a couple of days), and our manager could still deny the request. In other words it wasn't "everybody does whatever they want and takes vacation all the time," which seems to be a common fear people have about it. As far as I know, most people used common sense, and most requests were granted.
It was really great for one offs, like taking my car in for service, handling family emergencies, unexpected problems around the house, etc.
Having said all that, I'd be skeptical about unlimited PTO at a very small company. Bigger companies will have procedures in place to make sure things are handled fairly, with HR keeping an eye on how PTO is actually being used, investigating if certain teams never take PTO, etc.
I suppose the ideal would be to work for a place that gives you something like 6-8 weeks fixed PTO, but I don't know too many places doing that.
IMO the best way to make people comfortable in taking PTO is to create a team in which people can easily fill in for one another without disrupting work.
No matter what the PTO policy is, if you create an environment where people are inconvenienced and work is disrupted when people take PTO, then you've created an environment where there is social friction to taking PTO.
The USA-standard 2 weeks PTO a year is often dismissed as wildly insufficient by people in more civilized places. This new "PTO only when your manager feels like it" policy is even worse, which is saying something.
Personally, in the last couple decades, I've only worked at one place that tracked PTO. They pinched pennies everywhere, drove their people hard, and had predictable results -- people would come into the office sick because they'd used their balance that month; people would leave early because they were burned out. It's fucking archaic.
I go to India at least for 4 weeks in a year, sometimes longer. The typical 20 day PTO limit means I'm out of travel budget, have to do off the books deals with my manager, or dance with HR to get unpaid time off.
Since 2015, I instantly decline any job offer that doesn't have unlimited/flexible/discretionary time off. It's doubly useful: when the company has grown bigger, and hired middle managers who don't approve requests, it's time to switch teams/companies. I view it as a leading indicator of the culture changing. From my perspective, I've always been reasonable (I usually take 6 weeks off, and the max I've ever taken is 8).
If it's a tiny startup with a unique social culture, where everyone is radically open with each other about how they're feeling, then undefined PTO might be fine. But in general, being vague about things like this can to lead to anxiety and resentment.
Also, simply having the policy may harm your reputation among job applicants, as it reeks of PR and mind games.
That's just:
* 2 week (10 day) vacation in summer
* 3 week vacation in winter wrapped around Christmas and New Years (so let's say 12 work days off)
* one Friday off a month (12 days)
* slapping on 6 days around holiday weekends, or wrap a couple of long weekends around those Fridays off
40 days out of basically 240 scheduled work days seems reasonable enough.
What I really wish is every 2 or 3 years you earned a 3 month paid sabbatical to go chase your dreams or maybe even do skunkworks or shadow a leader in the org.
I would have a lot of unpaid free time on my hands if I suggested taking that much time off on the "unlimited PTO" scheme.
- 25 + 5 (must use 25, can collect arbitrarily) + 11 official holidays.
- The ones that can be collected can be paid out, the must-use ones cannot.
- Paying out collected days off at your current salary means you get more if you wait for a raise.
If I want more, I pay for it, and if I want less, I get paid more.
I've worked at places where it was hard to take a day or two off, and I've worked other places where it was easy to take 3 weeks off a couple of times per year.
We also have a silly time every year where the pto is about to reset, and suddenly everyone is taking multiple days off in the same month. I mean i guess they pick a less busy month for it to reset, but it just seems like it would be better if everyone picked a random month to go on vacation instead.
Of course it's not always the case; my current gig has unlimited PTO and doesn't seem like assholes if you take it. It can be nice, but it has been co-opted by shitty startups to save money and drain their employees.
6 weeks is 30 days off 8 weeks is 40 days off Every Friday for a full year is 52 days, but in practice less since there are a few typically Friday holidays. Would a manager be ok with someone having a policy of taking every Friday (or Monday) off for a year? Would they be ok with taking off all but 8 Fridays? This would be acceptable (generally, barring regularly scheduled meetings) in most companies I've seen where people get 8 weeks of vacation due to seniority.
- it turns an explicit allowance/limit into an implicit one which is a negative imo
- it's mostly American, it's rare in countries that have reasonable legal requirements for time off (like 4-5 weeks a year)
I have concluded that the best setup is:
- The company gives a generous (for the US) but limited number of PTO days
- Most of the company is in a state where it's ok for PTO to _not_ roll over, and the culture then normalizes using all of your PTO every year
- Ideally you work from a state where PTO _must_ be rolled over and unused days are paid out
They are still writing down how much time off you take, even if they're not writing it down where you can see. But that doesn't mean anyone reads those numbers.
Take some vacation. It'll prevent burnout, so it'll be good on net for your productivity.
If they really do fire you for taking vacation, well, unemployment is kind of like unpaid vacation, so at least take some paid vacation first.
This seems to work extremely well.
Sucks for people who tracked PTO religiously before though.
If you're content to coast at your current position, it's great because you'll take advantage of it to the extent that you can.
FWIW, I see this as a net negative (as an IC), it creates unnecessary stress.
If you were senior enough to get 6 weeks of vacation a year, would you trust your manager to take in your seniority when it comes to taking time off? Or would he look at his spreadsheet and say, "Meh, you need to not take so much time off."
From an upper management perspective, it prevents you from dealing with accruals, approvals, tracking systems that go along with it, differentiating sick time, running out to see about something with the family, etc. It's not a policy you put in place if you're planning to micromanage people's time off.
And with all that off the brain plate, you focus on the actual business goals.
but i've definitely heard of places that did it very wrong.
- Fixed allowance, which included sick time in the bucket, but you could sell time back each December
Shortly after I joined HR decided to just merge the 5 days of sick time, and whatever the vacation allotment was and tell people they have one big bucket. eg. 25 days a year. Nice idea. In reality everyone came in sick didn't want to touch that time. It was easy to watch colds and flu spread through teams then across the floor. It was brutal for productivity. No remote work at the time didn't help there either.
But, at the end of each year you could sell unused days back to the company (I think it was in blocks of 5). This was a really nice feature, prevented rolling over time, and was paid out in early Dec, so a good time to get a bonus of sorts. Given I was on-call and accrued a lot of comp time, I could typically sell back 10 days and just get an extra pay check each year, while still taking vacation.
- Unlimited
Never felt this was a PR scam or any sort of malice, but it did make it necessary to encourage people to take time. In the end I set a minimum number of days for my teams and tracked it, encouraging people to take off time.
This comes down to hugely cultural issues, and whether the leadership can make it clear that time off is necessary and expected.
This is definitely my favorite situation, as long as it's genuinely there to encourage employee well being, and people are judged on delivery and impact, and not on time off. ie. if you do a good job, take off the time you want without being micromanaged for it.
No, you don't get paid out though when you leave, which is a bummer.
- Regular fixed with no sale, and no sick day cap.
Going from unlimited to a standard fixed amount was oddly jarring, suddenly having to worry about counting days off, considering more when and how much vacation to plan for. In reality I've never really needed much extra time, but just having to consider it feels odd after years of constantly encouraging people to just take more time, and never worrying about counting days myself.
Encouraging people to be out/remote when sick is a huge improvement over job 1 too. People can be remote or off, and not feel there's a negative impact on their vacation time.
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Something I've not seen mentioned here as well is that at several finance jobs I've had I've been required to take 2 weeks mandatory leave each year. This is a compliance rule impacting people with the ability to impact books and records, or edit trading and account data. Employees are required to be out of the office and not transacting business for 2 consecutive weeks. It's a silly idea that if you're cooking the books that'll come to light if you're out for two weeks. I've seen this implemented in different ways at different firms with different limits, but it's all the same idea.
Especially for junior employees with limited vacation days being mandated to take two weeks at once can feel pretty harsh and limiting.
Its basically code for "zero time off" for the little people and multi month holidays for management.
Of course, it doesnt have to be like this, it shouldnt be like this ... but people are going to do what they do best.