The Unlimited Vacation Policy: Pros, Cons, and How to Best Use It

Do you remember the first time you rode an escalator?

Odds are, you were a child and with an adult who could show you the ropes (and assure you that you wouldn’t get sucked under the moving steps). But if you never encountered escalators until adulthood, you might be facing those moving steps all on your own.

You might know they’re there to help you, and you may see total strangers using them no problem. But since it’s so new to you, there’s still that trepidation in attempting to try it out. What if something goes horribly wrong and you ruin it for everyone, so the escalator is as helpful as the previous staircase-only solution? You don’t want others angry at you for ruining a good thing.

At the same time, you’ll look silly for asking for more information on how to best use one. You don’t want to seem like a silly or ignorant person. Seems like a lose/lose situation; maybe it’s best if we all stick to only staircases after all.

Now think of the escalator as an unlimited vacation policy. That way, you might understand where a big chunk of the hesitation around it is coming from.

The Unlimited Vacation Policy, Explained

Like escalators, an unlimited vacation policy is not inherently dangerous or bad for people. In fact, they’re there as a bigger help than the previous solution! It’s just so new to millions of workers that it takes time to get used to the idea/use it efficiently.

In a nutshell, an unlimited vacation policy means that workers can take off as much time as they want without limit. My first job post-college stipulated that I could have a maximum of 2 weeks’ vacation off per year. In my current role, there is no such maximum. The only stipulation is that I ensure all of my tasks and responsibilities are covered. That’s it. As long as I meet that threshold, I can take off as much time as I desire under an unlimited vacation policy.

The Positives of an Unlimited Vacation Policy

In my opinion, an unlimited vacation policy has overwhelmingly positive benefits:

• Cuts down on the admin work needed – admins no longer have to worry over who’s taken what paid time off under an unlimited vacation policy
• Increases employee productivity – less burnout means more work gets done
• Boosts company profit – a happy and healthy workforce translates to higher profit margins
• Increases employee health – taking the time off as needed, as opposed to an external metric, means less money spent on health deductibles and outright avoiding stress-related health complications down the road
• Improves recruitment efforts – all else being equal, the company with the unlimited vacation policy will look a lot more attractive to job seekers than the competition.

The Negatives of an Unlimited Vacation Policy

There really aren’t many negatives to an unlimited vacation policy – at least, not big enough negatives to counteract “better health, more time, and more money coming in”. The overarching negative is its newness. Not enough workers will actually take the time off they need because of burnout culture, and uncertainty over how much time off is acceptable. American work culture discourages taking time off, so there really isn’t an accepted standard to follow. To make things worse, the United States has a minimum vacation policy worse than many developing countries, which is because THERE IS NO minimum vacation policy in federal law.

I’m with Bernie Sanders on this one (and practically everything else). Things need to change desperately, and companies putting in policies like unlimited vacation is the way forward.

The only other negatives I can find relate to how an unlimited vacation policy replaces the preceding policy. Someone might feel slighted if, say, they were saving up their vacation days for a big payout. This varies by company, so if that’s the big protest against an unlimited vacation policy then the transition should include accounting for value lost to the worker.

Real-Life Example of a Hater

Lucky me, my company has an unlimited vacation policy in place! Even better: my direct superiors trust I get my work done and have zero issue with my taking time off! So I do, because job benefits need to be used; so far this year I have taken 3 weeks total of vacation and plan to take 1-1.5 more weeks off in the second half of the year.

Not everyone at my company, however, is comfortable with the policy. Some malicious weirdo at my company shoehorned their complaints about company vacation policies into an unrelated slack discussion. (Said discussion was about a 4 day work week, which I am invested in and am now, therefore, furious with Malicious Weirdo for derailing.) Malicious Weirdo had some interesting (read: disparaging) things to say about my company’s unlimited vacation policy. Among other things, they said:

• The current policy is “a scam,” but it’s “cheaper” (they included an American flag emoji after this comment).
• It’s ultimately predatory as a policy because there’s not a reminder to take your vacation
• Accrued vacation time is better because you can watch it pile and “you see it and know to take it” (dude…)
• “Would much rather have a reduced yearly bonus and accrued time off, if a trade off were required to make that switch” (Note: zero people are demanding tradeoffs.)

There were some other more batshit things Malicious Weirdo brought up, but calling a policy company execs worked hard on “predatory” and “a scam” went over like a lead balloon. Eventually Malicious Weirdo did admit calling it a scam was “a strong word” so… progress? If you squint?

How to Improve an Unlimited Vacation Policy

If you, too, find yourself dealing with a Malicious Weirdo then I suggest your company implement two crucial steps.

The first task is making a comprehensive FAQ page or guide detailing everything about the unlimited vacation policy. How is it different from the previous policy? Who is encouraged to take it*? Is there such a thing as taking too much time off? Too little? What happens if you take off too much or too little? It’s important to note in the guide the company is proceeding with trust over micromanaging your time off.

The second task is something I learned from attending EconoME a couple years ago (video below!) One of the speakers, Jeremy Schneider of Personal Finance Club, discussed his own struggles with the unlimited vacation policy. He noticed his employees felt bad about taking time off and simply stopped taking time off at all, which wasn’t the goal of the unlimited vacation policy.

To improve it, Jeremy then implemented the Minimum Required PTO Policy. His policy required his employees take one week off per quarter or four weeks off per year. I think this is a genius approach to ensuring workers actually, truly take the time off they need without wrestling with guilt and social disapproval. And, until Congress catches up with the developed world with lawful minimum annual leave, the best way to care for workers when federal policy refuses to.

With more educational resources and the “minimum required” tweak, the unlimited vacation policy is the clear superior choice.

Conclusion

Ultimately, unlimited vacation policies are an issue for the same reason an escalator was an issue for kids on their first mall visit. It’s so new that the general public doesn’t know how to work it without getting confused and tripping over it. In my opinion, what’s most necessary is simply more time to practice with it and get comfortable with using it. Folks will soon be riding it with ease without worrying a wink.

I think any company with unlimited vacation is taking steps in the right direction. We are all adults capable of making balanced decisions. Given a little more knowledge, we all can call out by ourselves how much time off is too much or too little, without damaging our career prospects and/or our health in the process.

Cover image credit: Jaakko Kemppainen via Unsplash

*The answer for this should be “everyone, of course!” FYI.