Is Unlimited PTO a Trap? Experts Discuss the Pros and Cons of the Policy

Is unlimited PTO a trap? Experts and workers discuss what an unlimited PTO policy is, how it works and all the pros and cons.

Summertime means warm weather, a little bit of a slower pace, and of course, vacation season – which for workers means clocking out and taking their time off.

But budgeting those vacation days can be kind of tricky, which is why one workplace benefit seems like gold: unlimited vacation.

It’s also a perk more young workers have been looking for during the pandemic. In a 2022 Harris poll for Fortune, more than 70% of Gen Z and Millennial workers said an unlimited PTO policy was a benefit that was important to them, with some going as far as saying that they would even sacrifice a higher salary for unlimited time off.

In theory, unlimited vacation sounds amazing, but in reality, what does unlimited PTO actually look like for folks who have it?

Well, let’s start with a positive – it’s a way to address a major issue many workers have struggled with over the past two years: burnout.

“Prior to us having [unlimited] PTO, I did a lot of studies about how much time people were taking off, and they were only taking off on average about seven to eight days. That's not very much, and it was very concerning to us,” said Nina McQueen, the VP of Global Talent at LinkedIn., where she helped usher in an unlimited PTO policy seven years ago.  

In the old model, you would have to earn your vacation, like a little bit at a time in order to be able to take it. With [unlimited] PTO, there are no waiting periods like that,” McQueen said. “So the reception from employees is, ‘it's great,’ and I think if we tried to take it out there'd be an uproar.”

This all sounds simple enough, right? But there’s another piece of the equation – do folks who have unlimited vacation actually use it?

Some workers like David Vedder are still getting used to the idea.

“Admittedly, I don't take a ton of days off in the first place,” he said.

Vedder works at a Fortune 500 company that offers unlimited PTO and he said when it comes to actually taking advantage of that benefit, well, it depends partly on the attitude of the workplace.

“My manager has actually been pretty upfront with, like, saying, 'Hey, like, you have this time, please use it, you know? Like, we mean [it when] we say when it comes to unlimited PTO, like, you know, if you have something you need to do, if you just need a day off, you know, like that's what it’s there for.’”

Getting that type of guidance from the top can make a world of difference, and both Vedder and McQueen said that they feel lucky that their companies are outliers of sorts.

“If employees don't see their managers taking time off or they feel that there's a frown when they ask for time off, that is going to make them not want to do it,” McQueen said.

“But at the same time, I mean, it's not lost on me – and I don't think that it's lost on anyone else that, you know, I do think about, ‘Well, you know, like you say, it's unlimited, but, if I really take advantage of the unlimited [PTO], like, you know, are there going to be repercussions on the back end?’”

Vedder said he’s never felt that type of pressure and that he feels fortunate to work at a company where workers are encouraged and feel comfortable clocking out when needed, but for others at companies with unlimited PTO, this trepidation is common, and whether or not people will take advantage of unlimited vacation usually morphs into another question: will it impact productivity?

“When companies use unlimited vacation policies, it is true that people take more days off, but they also work harder,” said Iwan Barankay, a professor of management at The Wharton School who studies workplace behavior.

“Companies still measure your performance, and as they no longer keep track of how many days you are there, they pay much more attention to your performance instead,” Barankay said.

“This is something that comes in quite easily to those people who are very productive and perform well, so those people actually tend to take somewhat more holidays when there's unlimited vacation. But other people who kind of struggle with their requirements of work, they don't take more vacation at companies where there's unlimited vacation policies, and the reason for that is, again, with unlimited vacation, the threat of firing becomes more acute.”

Taking vacation time can also require more work both before and after the time off as workers prepare for their trips and then catch up once they're back. That stress can also dissuade some people from taking advantage of unlimited PTO.

“If you think about when you go on vacation, you end up working a lot of hours before you go to get ready to go. And then while you're there, oftentimes a lot of us are checking our email, or we're trying to, because there's meetings happening where there's decisions being made or there's things that I have to address or whatever. And then coming back, we end up working these long hours to catch up. So because of that workload, sometimes people are reluctant to take time off,” McQueen said.  “I hear this all the time across the U.S.: Americans don't take a lot of time off.”

To help with this, on top of unlimited PTO, McQueen says LinkedIn has two full weeks of paid shutdowns per year for U.S. workers between Christmas and New Year’s and the week of July 4th.

It’s a chance to recharge – something that became a priority for many during the pandemic, so again: why haven’t we seen more companies jumped on board with unlimited PTO?

Barankay said part of the equation has to do with the simple fact of scheduling.

“I think one of the reasons is that companies that plan out the work that needs to be done in a given time period, they need to be able to respond to the demands of their clients or the market, and if there's uncertainty about who will be there or not, then, you know, this makes it more difficult for them to plan,” Barankay said. “So think of cashiers at Wal-Mart. Those jobs typically don't have unlimited vacation policies attached to them because Walmart needs to be able to plan how many cashiers are available at any given point in time compared to people in management positions.”

Perhaps these old school ways of the workplaces could shift in the future. Already over the past two years, we’ve seen the traditional model of the workplace upended, with hybrid and work from home options becoming the norm.

So when it comes to workplace policies and time off moving forward, many workers will continue to reassess what exactly they want from a job – both on and off the clock.

“When I look at the pandemic and what I've taken from it is that it's made me really reevaluate what's important to me. This tallying days that you have for sick days, vacation days, you know, time stamping when you're going in, you know, checking off when you're going out – like, this regulation is not where we are anymore, and to be honest with you, I don't think it's something that, you know, is necessarily needed,” Vedder said.

“I think like workers nowadays are looking at a bigger picture and saying, 'You've hired me to do a job. If I'm doing that job well and efficient with my time and ensuring that whatever is put in front of me, I'm checking that box, and then, you know, going above and beyond that – that's all that should matter.’”