Career Development

What is Unlimited Paid Time Off (PTO) and How Does it Work?

February 25, 2020

Unlimited paid time off (PTO) is a structure in which employees are not assigned a set number of paid days off at the start of the year. Instead, employees are provided with the freedom to take time off when needed as long as doing so will not disrupt business. This provides significant flexibility as an employee and rewards productive use of work hours.

In this article, we'll discuss unlimited PTO including what it is, how it works and the pros and cons for staff members.

What is unlimited PTO?

Unlimited PTO is a vacation policy that allows employees to take as much free time as they want as long as it does not interfere with their ability to complete their work.

This means that as long as the employee's work has met their employer's expectations and coordinated their leave with others to ensure an absence does not impede their work, they are free to take leave. Unlimited PTO does not mean the employee can not show up for work at will if they have nothing to do, as most companies still have rules for requesting PTO. The policy simply avoids putting a hard cap on the amount of time the employee can take in a given year.

Read More: When to Ask for a Leave of Absence

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How to use unlimited PTO

If you're not used to being able to exceed a couple of weeks of PTO per year, you may be unsure of how to proceed under unlimited PTO. If you're working for, or considering an offer from, a company that offers unlimited PTO, here's what you need to do when you want time off for non-emergency reasons:

  1. Understand company policy. Every company will establish its own rules for implementing unlimited PTO, and it's important to understand the rules and regulations regarding your leave. Knowledge of the specific process required to request leave is essential to remain in good standing. As you progress through additional steps, be sure you are acting in accordance with your company's unlimited PTO policy.
  2. Plan ahead for any time off. Even if you have freedom to take unlimited leave, it's still important to handle that leave responsibly. If you know you want to take an extended period of leave where you will be gone for several days or weeks, it's important to prepare for the time in advance. As soon as you know you want time off, you should begin planning, as the longer your lead time is the better prepared you and others will be.
  3. Speak with coworkers and management. It is likely that your company's policy will include rules about giving advanced notice before taking PTO, but it is a good policy even if it is not mandated. In addition to speaking with your manager, it's helpful to speak with any coworkers who you have regular interactions with. This ensures that if they will need anything from you in the time they are gone, they have advanced warning and can plan accordingly.
  4. Request instead of demand. Although you can take as many days as your work schedule allows off, it's important to remember that you still are asking for your time, not demanding it. There may be unforeseen reasons that your boss or manager needs you at the time you are targeting and posing your time as a request shows respect for that possibility.
  5. Get your work done. A critical component of an unlimited PTO policy is that the employee can take as much time as desired without affecting their work. That means that you need to make sure that you have completed everything that will be needed when you are gone before you have left. This is where long preparation time is beneficial, as it positions you to have ample time to prepare and complete the necessary work to allow for your time off without it disrupting the company's production and workflow.
  6. Get coverage if needed. Sometimes, you may not be able to make all of your PTO preparations in advance. If you work in sales, for example, you can alert clients you'll be away but they will need an alternative in the case of emergency service. Similarly, if you have responsibilities to complete daily, consider speaking with management or your coworkers to ensure that suitable coverage is in place.
  7. Be flexible when possible. If unforeseen work comes up, or another employee would also like the time off to go on a vacation and concurrent absences would be disruptive, consider adjusting your days off. By using the day you intended to take off to get work done you would have done on your return, you can then take your time off at the later date.
  8. Leave your work at work: Taking more days off than you are used to may take adjusting. Remember that in order to take your time off, you needed to have your work all completed or covered. Enjoy your vacation secure in the knowledge that you did everything you needed to let the company continue on until you return.

By following these rules for requesting time off in an unlimited PTO system, you can maximize your days off without harming your standing at work. A responsible approach to unlimited PTO makes it so that both you and your employer benefits from your vacation days.

Read More: How to Ask for a Day Off: Tips, Template and Example

Advantages of unlimited PTO

If you're considering a position at a company that offers unlimited PTO, there are several positives for employees. Here are some top benefits of receiving unlimited PTO:

  • Efficient time management: With unlimited PTO, it can be easier to stay focused and manage your day because you know that if you finish your work more quickly, you can take additional time off.
  • Increased productivity: Not only does unlimited PTO incentivize you to make the most of your time at the office, it actually makes it easier to do so. When you have the ability to take time off when you need it, the days off allow you to relax and relieve stress. When you get back to work at the end of your time off, you may be more likely to work efficiently and effectively. This then makes it easier to stay ahead of your work and set up your next vacation.
  • More communication: Because unlimited PTO policies rely on coordination between management and employees to ensure work is completed, it helps to foster communication between staff. This means you are more likely as an employee to be informed about what others around you are doing and what is expected of you.
  • Less administration time: If you work in human resources, you not only benefit as an employee from the ability to take time off, it also makes your work easier. Unlimited PTO can reduce the hours a company's HR department spends tracking employee time off.
  • No pressure to come to work sick: While PTO is often thought of in relation to vacation days, it also commonly includes paid sick days. With unlimited PTO, you can take the time you need to get healthy then make up the work when you get back in. This can also make you less likely to get sick from coworkers coming in when they are sick.
  • Find and follow your interests: With unlimited PTO, you have more time to pursue your passions. Whatever you love doing, adding days off into your year means more time to do the things you love.
  • No December urgency: If your employer provides annual PTO but without rollover, that can result in a rush to use your days at the end of the year. Not only is this an inefficient system for the employer as many employees take off at once, but the end of the year may not be your ideal time to take days off. This can lead to either losing the days by not taking them or creating pressure in the days before or after your time off.

Read More: How Long of A Notice Period Should You Give

Disadvantages of unlimited PTO

Although there are many benefits for employees with unlimited PTO, there are also disadvantages to consider. Some reasons you may prefer a traditional PTO structure include:

  • Fear of use: While unlimited PTO provides an employee with the ability to take as much time off as they would like provided their work is getting done, sometimes this has the opposite effect for employees. Because there is no contractually mandated number of days available, some employees end up taking less than the standard two weeks as they feel uncomfortable declaring their work is done and their schedule is free.
  • Loss of accrued days: One benefit of receiving a set number of days off each year with rollover is the ability to stockpile these days. Often an employee will gather these days to get a form of a severance package when leaving a company. If you have accrued days when your company switches to unlimited PTO, you may need to negotiate for their value.
  • Absent coworkers: While the ability to take time off when your work schedule allows it is great for you, others taking their extra time off can make your day more challenging. With unlimited time off, employees spending more time away from the office creates a higher probability of a coworker you need not being available.
  • Potential for abuse: Although you may be responsible with your use of unlimited PTO. the system does have the potential for abuse by employees. If one or more of your coworkers takes excessive time off, this can lead to an increased workload for you as a result of covering work while they are away.
  • Structural challenges exist in some work settings: If you work in a setting where employees are operating under a collective bargaining agreement, switching may be challenging. The employer may require trade-offs for the move, and a union may determine those trade-offs are too much to justify unlimited PTO.