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November 15, 2023
February 17, 2022

What Is Unlimited PTO and How Does It Work?

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Unlimited paid time off (PTO) sounds too good to be true. That’s because, in many company cultures, it can lead to people taking less PTO because they aren’t sure how or when to take it or are worried about how they will be perceived. However, it can be beneficial for both employee and employer to encourage time off. Unlimited PTO can lead to employees being more productive and efficient when they are in the office, and it means less paperwork for HR directors. We love a good win-win. As we begin, let's talk about what unlimited PTO is, what challenges it introduces, and some tips on how to have a successful unlimited PTO policy.

What Is Unlimited PTO?

Unlimited PTO is defined as a workplace vacation policy that allows employees to take as much time off as they need/want as long as their work is completed. It simply avoids putting a hard cap on the amount of time an employee can take off in a year. However, unlimited PTO depends on employees being responsible about their time usage—if an employee is taking multiple weeks off and isn't dependable in their work or work schedule, there's probably going to be a conversation with their manager.

4 Challenges of Unlimited PTO

There are some unique challenges that unlimited PTO presents:

1. Employees May Abuse The Policy

This is a perennial worry of leaders—offering THAT much freedom sets the organization up for failure if employees take too much time off.

2. Social Pressures Lead To Less Time Taken For Vacation

Some studies suggest that not putting a number on PTO can lead to employees taking less time for their vacations because they may feel judged by their coworkers for taking time off—even if that judgment is only perceived and not actually real.

3. Time Tracking

Tracking time off can be a huge challenge at any organization, but if PTO is unlimited, the problem intensifies. How do you accurately report on PTO when employees can take as much time as they like?

4. Implementing Guidelines

Once you have unlimited PTO, it can be a challenge to put any guidelines in place because some employees may feel that such guidelines make unlimited PTO decidedly limited. Communicating structure while still allowing freedom to use PTO whenever and however they like can be a big challenge.

10 Tips for a Successful Unlimited PTO Policy

So, how do you offer this perk in a way that it is actually a benefit and not just another opportunity for people to feel guilty for not working hard enough? 

1. Lead By Example

Lead by example and take time off when you need a break or aren’t feeling well—especially if you manage a team. When employees see you taking time off as needed, they’ll feel more comfortable taking time off themselves. 

2. Celebrate PTO!

Create a Slack channel or another way to share photos of what people are doing with their PTO. Encourage people to share about their vacations with their teams and with the rest of the company. 

Also, did you know that anticipating and planning a trip is sometimes the happiest part of the vacation for people? As people imagine the possibilities and have something to look forward to, it will boost their mood and put some pep in their step even before they leave for their grand adventure. 

3. Admit That Unlimited PTO Is, Well, a Little Misleading

Let’s be real: the “unlimited” part of unlimited PTO is not exactly true because if it was truly unlimited, people could come in for only one week a year. Be specific about what it means at your company and put in writing what the official company policies are regarding PTO. Is there a required amount of notice to give or other restrictions? Let people know upfront so they feel empowered to take PTO in a way that benefits both them and the company. 

4. Recommend a Set Amount of Time

This can be tricky because as soon as you recommend an amount of time, people think it is a set rule, which defeats the purpose of having an unlimited PTO policy. Managers could share examples of ideas for using PTO such as a week or two in the spring and a week or two in winter. 

5. Encourage Sick Leave

Hopefully 2020 taught us that having people stay home when they’re sick can make a world of difference. Not only does it stop them from spreading disease to the rest of the workplace and to customers and clients, it helps them get better faster. Rest is an important part of recovery, and employees should feel like they’re able to take off when they need.

6. Support Time Off for Mental Health

Mental health days are just as important as traditional sick days for the overall well-being of an employee. Mental health can have just as much of an effect, and sometimes more, on performance as physical health. If someone needs an occasional day off because they’re having an off day, an anxiety attack, reacting to medication, or something similar, they shouldn’t feel like it’s any less valid than a cold or flu.

Establish how your workplace will handle taking time off for appointments so employees feel they can fit in weekly therapy, exercising, breaks, and other things that they may need to manage mental health. 

7. Separate Work and PTO

Unlimited PTO should encourage employees to give their best work when they are at work. Take off when you need to for a break, appointments, family issues, or whatever else that might distract you from work so that when you’re in the office, you can focus.

An important part of this is allowing employees to actually mentally check out of work when they take PTO. If they feel like they still need to answer emails or calls or that their work isn’t being covered, the PTO won’t have the desired effect of helping them come back rested and rejuvenated. 

8. Realize Support Roles May Have a Harder Time Taking Time Off 

You may need to take a look at the structure of your organization if you're wondering why people aren't taking time off. Some people, especially those in customer-facing roles, may feel there’s no one who can cover for them if they’re gone. Make sure multiple people are trained on processes so if someone is on vacation, they won’t be bugged for information. As with everyone, encourage support roles to take time off and assure them things will be fine. Then make sure things are fine when they DO take time off.

9. Take Time Off, Even When There’s Nowhere to Go

While things are starting to open up to travel more throughout the world, sometimes it may seem like there’s no point in taking PTO if there’s nowhere to go. While you may not be leaving your home, you can still take a break from work. Take a day off and turn off your devices. Explore your neighborhood, sleep in, or spend time with family. It doesn’t have to be a full-fledged vacation to be quality time off, and everyone needs to take breaks regularly. A benefit of unlimited PTO is there is no incentive to accrue days for a payout—they’re specifically meant for rest and relaxation, so use them to rest! 

10. Encourage Time Off for Special Moments

Work-life balance isn’t just scheduling the right ratio of vacation time to work time, it’s being able to spend time with the people you love. Let employees know they can take time off not just for family emergencies, but to take someone to lunch or go to a child’s recital. Things like this may only take an hour here and there, but they are the kind of memories that last and the moments that truly enhance your employees' personal lives. 

Get Your Paid Time Off Policy Ready!

Like mentioned above, often just the idea of limitless possibilities for time off offers a mental health boost. The best thing you can do is encourage a culture where time off is valued just as much as time in the office. Using PTO improves productivity and employee engagement, so work hard, play hard, and (whether it’s unlimited or not) get out there and use your PTO!