Unlimited PTO: What Are the Pros and Cons?

Who wouldn’t want unlimited paid time off? While getting as much paid vacation as you want sounds ideal, there’s more to this workplace benefit than first meets the eye — and it has generated plenty of controversy in organizations. It’s important to understand the benefits and drawbacks of unlimited PTO before you decide to work at a company that offers this.

[SEE: 20 Companies That Offer Unlimited Vacation Days]

What Is Unlimited PTO?

With unlimited paid time off, employees receive carte blanche to decide how much time to spend out of the office and off the clock, whether for vacation, sick leave or other reasons.

“Unlimited PTO is the concept that your employer gives you an endless bank of time without limitations,” Vicki Salemi, a career expert at Monster and former U.S. News contributor, said in an email. “There’s no concept of accruing hours or going negative with your PTO if you spend more time than you’ve accrued. There’s also no sense of rolling over time to the next year or use-or-lose-it mentality.”

Unlimited PTO: Pros

When it works as it should, employees benefit from an unlimited PTO policy by potentially getting more days off than they might from a traditional limited PTO plan. Pros for workers could include greater freedom and flexibility, as well as a feeling that their employer trusts and respects them enough to let them decide how much time to take off, Salemi said.

“Especially if they’re caregiving and have personal responsibilities or if they’re grieving a family member, friend or even a pet, they may find that they need to take time off that would have surpassed a traditional PTO policy,” she said. “For instance, caregiving can be intense ‘work,’ although unpaid, and they will still need PTO for mental health, a vacation or staycation, and more.”

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Unlimited PTO: Cons

A potential drawback of an unlimited PTO policy is that without a specified number of days that employees “must” take off, some might end up not taking any time off. This is a particular risk for very busy employees in industries that lack reliable slow periods.

According to human resources consultant Conor Hughes, employees with unlimited PTO often take off less time than they would if they were given two weeks of vacation. He noted that without accrued days, workers can feel guilty using the unlimited policy, which can lead to burnout and lower productivity over the long term as employees opt out of recharging.

“They may feel pressured to not take any time or take the time that they need if they’re overworked and approaching burnout (or already there),” Salemi said. “Sometimes, with an abundance of time to take without having a bank and instead, keeping it fluid, they may not take enough time, such as even a day here or there or staycation for a few days, that can provide them with the boost they need.”

Another potential pitfall of unlimited PTO can occur if someone takes a generous amount of time off, especially during a busy season or when a big project is due, but then fails to get their work done. This could lead to performance issues if the employee drops too many balls during a long stretch out of the office.

Nolan Church, co-founder and CEO at FairComp, said in an email that he used unlimited PTO both when he was head of talent at DoorDash and chief people officer at Carta. Church flagged “unwritten rules” as another problem for employees with unlimited PTO. “Employees might be unsure about how much time off is acceptable, which usually leads to underuse,” he said. “Employees also might feel pressure from peers who do not take advantage of the unlimited policy.”

Church also noted that fairness can come into play. “How the policy is applied usually comes down to the manager and team dynamics,” Church said. “Employees with weak managers or understaffed teams may not be able to take similar PTO to teams with strong managers that are fully staffed.”

Some people feel strongly that unlimited PTO hurts workers. Brian de Haaff, co-founder and CEO at Aha, derided the policy in a popular LinkedIn post, calling it “inherently unfair.” “At the core, unlimited PTO means leaders have just refused to establish a fair program and have just pushed it off to others,” he wrote.

Unlimited PTO vs. Flex Time Off

Unlimited PTO is one type of flex time off that employers may offer — but these terms don’t always mean the same thing. While unlimited PTO refers specifically to a paid-time-off policy in which employees choose how many days off to take, flexible time off refers to any type of flexible work arrangement that an organization may offer for out-of-office time, some of which may have time limits or may be unpaid.

“Flex time off groups sick, vacation time, etc. together into the same bucket, but the time off may not be unlimited,” Salemi said. “There may be a cap on the maximum number of days employees can take each year, even though they don’t have to allocate the reason when submitting their timesheet.”

Other types of time off are gaining traction as well. Church said he has experienced “minimum time off,” which requires employees to take a specified amount of time off each year. He said he prefers minimum time off to unlimited PTO and feels that the former offers employees two distinct advantages: guaranteed rest periods because it ensures all employees take time off, and reduced ambiguity since employees have a defined amount of time off. “Minimum time off is a better approach,” Church said. It reduces uncertainty and anxiety about how much time is acceptable to take.

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Unlimited PTO: What Are the Pros and Cons? originally appeared on usnews.com

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