Why Unlimited Vacation Days Is a Scam

Companies are increasingly including unlimited paid vacation in their job offers, as it’s a popular temptation among millennials and Gen Z workers.But you have to think twice if it’s really that great – research shows that workers often take less free time with unlimited vacation. Why is that? I will explain.

What is Unlimited Paid Day off?

Unlike traditional allowances for vacation days (13 days average in the US) and sick days, unlimited PTO makes no such distinction and has no set limit on the number of days you can take a vacation. However, the term “unlimited” is a bit of an exaggeration, as most companies have rules or guidelines that prevent you from abusing the policy. This may include requirements for advance notice of booked days, shutdown periods in which dates cannot be booked, or even restrictions based on how many days you have already worked. Typically, requests must be approved by the manager, who – when it comes down to it – has the final say on whether you are approved or not.

Why Unlimited Billed Time Isn’t So Good

The biggest problem with unlimited paid vacation is that people tend to have less rest compared to traditional vacation policies. A study by Namely found that employees with unlimited vacation days took an average of 13 vacation days, compared to 15 days for their colleagues with fixed PTOs. Why could this be? Without clear guidelines as to what is acceptable, most employees end up cutting their time to avoid appearing lazy or otherwise appearing to be abusing the policy.

Like so much in a work culture, action is louder than words. If managers do not provide clear (and frequent) information about what is truly acceptable, most employees will follow what everyone else is doing based on how they perceive the existing culture of the company.

If you are, for example, a potential new employee who is nervous about sticking out your neck, you are even more likely to make concessions. At worst, workaholic workers set the tone, resulting in workers competing with each other to prove who least needs the weekend, effectively negating the benefits of unlimited PTO for employees who want to fit in, while maintaining a balance between work and personal life. …

You can’t get paid for unlimited PTO when you quit

By handing over the vacation schedule to managers and employees, the employer benefits in two ways:

  • It’s cheaper to work: With traditional weekends, free time is guaranteed, which means HR must keep track of the vacation calendar and account for accruals and carry-overs. With unlimited PTO, an employer doesn’t have to pay unused vacation days when you leave the company – an amount that can cost thousands of dollars.
  • Increased productivity: If employees are not compensated for unused vacation days, then the employer benefits most from this additional workforce.

What to look for with unlimited PTO

We can not say that unrestricted PTO – it’s bad. The flexibility it offers may be more convenient than setting vacation days. For example, a few years ago I had to take an unexpected day off at the end of the year for a funeral, and my employer turned me down because I didn’t have any vacation days (luckily, my boss just closed his eyes and let me take the day off).

However, even with this flexibility, you will want to confirm what kind of unlimited PTO a potential employer is offering. To be on the safe side, ask your potential boss how many days on average people take a break. Before accepting a job, ask if they have any written information about their policies, including eligibility, how to make requests, and restrictions on approval. And remember, unlimited PTO is not a privilege, but a policy.

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