Unlimited Time off: A Blessing or a Curse?

The amount of employee time off per year has long been debated by companies, particularly companies based in the United States. On average, Americans are alloted about two weeks of PTO a year. And even though this is a standard offer, many employees worry about utilizing all of their time off because they don’t want to appear like they aren’t pulling their weight or slacking off in front of their employers. In fact, according to Big Think, the United States is one of the only countries within the Organisation for Economic Co-operation and Development that “does not require employers to provide even a day of paid leave to its employees.” Compare this to other countries around the globe: while France is often made fun of by Americans for their short thirty-something hour work week, French workers can receive up to five weeks of personal time off. USA Today claims that Austria and Portugal are tied for the most time off per year, which is about thirty-five days total.

But what happens when companies offer their employees unlimited time off? Well, it may not be as glamorous as you think.

Unlimited time off is when a company allows their employees to choose not to go to work for whatever reason, without reporting it, and still get paid. No questions asked. Sounds a bit too good to be true right? In one instance documented by Society for Human Resource Management, the company Virgin Group recently applied the idea of unlimited time off to their 170 employees. Richard Branson, the head of the company, stated in his blog, “This is surely one of the simplest and smartest initiatives I have heard of in a long time and I’m delighted to say that we have introduced this same (non) policy at our parent company in both the UK and the US, where vacation policies can be particularly draconian. Assuming it goes as well as expected, we will encourage all our subsidiaries to follow suit, which will be incredibly exciting to watch.” Branson explains that the inspiration for utilizing unlimited time off was seeing Netflix implement a similar policy.  

On the other hand, the SHRM site also asserts that not reporting time off can be a hindrance for some employees. For example, not reporting PTO could result in issues with the Family and Medical Leave Act. This act allows employees covered by insurance to take unpaid leave for medicinal or familial reasons. By not being able to distinguish PTO, employees may not receive the same benefits through this policy.

In a situation like this, there are obviously many pros and cons.

One positive aspect of unlimited time off is that employees don’t feel pressured to take all of their time off at the end of the year. There is no worry about a lack of roll over dates if the offer is unlimited from the beginning. Employees may feel compelled to be as productive as possible when at work because the scarcity of personal time off isn’t a concern. When at work, you work. When you’re sick, you stay home. When you need to recharge, take a day off or spend time with your family. Furthermore, you would be less likely to catch a coworker’s cold with the unlimited time off system because they would more likely opt out of going to work while sick.

Some negative aspects of unlimited time off is that this certainly wouldn’t work for every company. Bruce Elliot of SHRM’s compensation and benefits managing team says, “Do I see it happening at a General Motors plant? No, absolutely not…It’s unionized and having a high percentage of nonexempt hourly workers makes it difficult to manage and administer.” Another concern with unlimited time off, especially in the United States, is appearing to not carrying your weight at work. It may seem that the policy is unlimited, but employees with this luxury may still remain fearful about the status of their position if they are not present in their work environment, like how Big Think states that most Americans don’t take their full paid time off for risk of putting their job in jeopardy. Employees also may need to ensure that the work they’re responsible for is completed and/or stays ahead of schedule when taking undistinguished time off.

One negative case of unlimited time off occurred at the Los Angeles Times. The newspaper company employed a “discretionary time off” policy that did not distinguish PTO from sick days to leisurely time off. Editors and journalists at this company became angry that they weren’t getting proper time off for the work they were putting in since all PTO defaulted to the discretionary strategy. According to The New York Times on the issue: “Employee fury instantly filled the Internet. ‘People here are completely outraged,’ said one employee, who asked not to be named out of fear of reprisal. ‘Traditionally there was a compact. You put in your hours and you get a certain amount of vacation. And suddenly that’s gone.’”

Perhaps the solution for this PTO debate is that each employer should assess what would be best for their specific work environment. For example, CEO Ryan Carson runs a company called Treehouse and decided that his employees should have a thirty-two-hour work week situated between Monday and Thursday. He came to this realization after deciding that he needed to set aside more time for his family. According to The Atlantic, “Citing the benefits of a more flexible schedule, Carson believes that the reduced time in the office ultimately leads to an overall more productive work environment…‘It’s not about more family time, or more play time, or less work time–it’s about living a more balanced life.’”

What are your opinions of unlimited time off? Comment below.