At many workplaces in the U.S., it doesn’t matter if you’re sick, grieving, pregnant, or burnt out. You have to show up or risk losing your job. The only hope American workers have for a modicum of work-life balance (apart from legislation) is to find an employer that offers paid vacation. The apex of that policy — or so we’re told — is unlimited paid time off (PTO). But unlimited vacation isn’t as straightforward as it might seem, which is why workers ought to understand the ins and outs of this trendy benefit.
What Is Unlimited PTO?
While most employers offer a fixed number of vacation days, companies that have unlimited PTO don’t set a limit — at least in theory. Today, only 4% of companies have unlimited vacation time, though the policy has become a popular marketing tool in the tech and media industries.
How Does Unlimited PTO Work?
If your employer provides unlimited PTO, you’ll still have to request time off. Typically, you’ll ask your boss and team to ensure there aren’t any major conflicts. This also gets to the crux of unlimited PTO’s limitations: No matter how much vacation time you request, your boss has the final say. Some employers might even offer clear parameters, such as unofficially capping time off.
What Are the Pros and Cons of Unlimited PTO?
You get more vacation time (in theory).
Companies pitch unlimited PTO as a competitive employee benefit, one that guarantees a healthy work-life balance. And that’s true at some workplaces. But since upper management always has the final say, the reality is that some employers might implicitly discourage employees from taking an extended vacation. In fact, the Society of Human Resources Management reports that employees with unlimited PTO often take less time off, in part because employees are unclear about how much time off is acceptable.
It’s easier to plan.
Unlimited PTO makes it easier to plan time away from work. If you want to take a long vacation, for example, you don’t have to worry about cutting plans short because you run out of vacation days.
There’s no December rush.
Employees with traditional PTO have to worry about using up all their days before they expire in the following year, which often leads to a December vacation rush. That isn’t a problem for workers with unlimited time off.
Sick days are often included.
Many employers that offer unlimited PTO also offer unlimited sick leave. Unlike many countries, the U.S. government does not mandate sick pay.
You have to navigate office politics.
Because of the ambiguity at the heart of unlimited PTO, workers are often left unsure of how much time off they’re allowed to take. It can also lead to resentment between employees if team members feel like their peers are abusing the policy.
It’s not really unlimited.
Rarely is unlimited PTO truly unlimited. Again, oftentimes companies simply use the benefit to attract workers without actually addressing work-life balance.
You won’t accrue vacation time.
If you quit your job, employers often have to pay workers for time not worked, including unused vacation days. But since unlimited PTO doesn’t have a set number of days, employers don’t have to compensate employees for time they don’t take off.
Cheapism's Take: Is Unlimited PTO a Good Policy?
The answer depends entirely on your workplace and its culture. If your employer is clear about its expectations and genuinely supports a work-life balance, then unlimited PTO can work to your advantage. But unlimited PTO can also be an empty promise and marketing ploy, especially if the company discourages taking time off. For that reason, federally mandated PTO — as it is done in Europe, for example — would be a far more effective and equitable solution.
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