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Is unlimited vacation time really unlimited?

(NEXSTAR) – Scrolling through job postings, one eye-catching perk is showing up more and more frequently: unlimited paid time off. Over the past several years, many companies — especially in the tech sector — have switched to offering their employees an uncapped number of vacation days or PTO.

A 2022 survey by the Society for Human Resource Management found 6% of companies were offering unlimited or open leave.

“With unlimited PTO, it gives an employee a little bit more control over that work-life balance,” explained Yvette Lee with the Society for Human Resource Management. “Say for example, an employee really needed to go away for two weeks to attend a graduation, or they really wanted to take a two-week leave to go on this phenomenal vacation … unlimited PTO means that they would be able to do that.”

There are benefits to the employer, as well, Lee said. “It’s been known to reduce the risk of employees burning out. It is used to attract and retain talent. Conceivably, there is a little bit less of administrative burden in terms of tracking vacation or PTO. And it also has been known to help with limiting the liability that’s on an employer’s balance sheet.”

That’s because some states require companies to pay out any accrued vacation days when an employee leaves. That’s not the case when the amount of PTO you’re entitled to is unlimited.

Sounds like a win-win situation for workers and employers, right? Well, it doesn’t always play out perfectly.

Some employees don’t like the ambiguity of an unlimited policy, Lee said, and would prefer to know exactly how many days they’re entitled to.

Managers also may need to have difficult conversations with employees who “try to abuse the policy,” Lee said.

“There’s always the one. There’s always going to be that one that’s like, ‘Oh, well, you know, I have unlimited PTO, so I’ll work one week, and then try to take off for three weeks.’ That’s not really the spirit of unlimited PTO.”

People also shouldn’t try and use unlimited vacation to “avoid work,” like by taking time off specifically around deadline or during busy seasons. Lee said the intent of the policy is to give people time to balance work and life, not get out of working.

Lee offered an example that better fits the “spirit” of unlimited vacation: If someone has been working hard on a project for six months, they may want to take a month off to recover and catch up on their personal life. As long as the manager and employee agree, and work is getting done as needed, that sort of agreement would be possible under unlimited PTO.

If you’re trying to navigate an ambiguous unlimited vacation policy, Lee advised talking openly with your manager about expectations.

“It’s been my experience that when employees go into conversations, saying, ‘I’d like to come to an agreement, because I am foreseeing needing X, Y and Z in the future, but I also know that there are business needs. How can we navigate that?’ That can be very helpful for an employee navigating unlimited PTO.”

In practice, workers with unlimited vacation don’t even seem to be taking much more time off than workers with more traditional benefits. The Bureau of Labor Statistics found in 2021 that the average private sector worker got 11 days of vacation time after working at a company for one year. In 2022, a survey by HR software company Namely found people with unlimited PTO were taking about 12 days of vacation a year, on average.

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