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Do you think an unlimited vacation policy is a good idea?

Jeff Andrews's Profile

Some employers worry employees will take advantage of it, but most studies show it actually decreases the amount of vacation employees take. What do you think?


Topic Expert
Wayne Spivak
Title: President & CFO
LinkedIn Profile
(President & CFO, |

Unlimited in what sense? Theoretically you could take 365 days a year or is it taking all your allotted vacation time together?

The latter it depends on the number of vacation days in the latter. Different since you give somebody three weeks I would allow them to take two weeks at a time, making this mandatory for anyone in accounting

I don't think it's the greatest idea in the world to give unlimited vacation, I think it would hurt productivity amd morale.

Costas Constantinides
Title: Managing Director
Company: C.A.C Professional Accountants
(Managing Director, C.A.C Professional Accountants) |

In my humble opinion, giving not unlimited but more "flexible" vocations will increase productivity and morale. At the end of the day, what is important to the empoyer is to see the employees working efficiently and effectively in order to achieve the pre- determined targets and goals.

(CFO) |

I've never been employed anywhere that such a policy would have worked. You'd have abusers and those who played fair. The abusers would see those who didn't take advantage of the policy as being "losers". The fair players would see the abusers as being unfairly rewarded for malicious behavior.

Compare it to the traffic you face every day during commute. The roads are a shared resource with a set of rules for all to follow so that they flow as effectively as they might given the traffic load at any given time. But, some drive like they own the road and create peril for themselves and the others. Some follow the rules and yield to those who do not. But they stew over the misdeeds of the few abusers and secretly hope they crash and burn....literally. They are demoralized by the actions of the abusers.

I started out my career a definite theory "Y" manager believing that people actually wanted to work and all I needed to do was provide the opportunity. Years of experience may not have made me a theory "X" supervisor but, I now am much more of a realist than I once was.

Most people will put their own self interest in front of the organization's - and that of other individuals as well - and that leads to abuse of policies such as the one you are inquiring about. And, as Wayne has already said, that hurts productivity and morale for the entire organization.

My motto is "be tough but fair". The best bosses I've had over an almost 40 year corporate career have been like this.

I strive for the same in myself but am often undermined by higher ups prone to a softer touch or making exceptions and not fully aware of what is really going on in the trenches. And sometimes, I'm just my own worst enemy. ;-(

Topic Expert
Bob Stenz
Title: Controller
Company: Silicon Valley start-up
(Controller, Silicon Valley start-up) |

Yes, I think unlimited vacation (same as a policy of not accruing for vacation earned and not paying out on unused vacation for terminated employees) is a good policy in the right settings. Startups (where cash is generally more critical) and companies with a large number of employees who do not report vacation taken are good examples. Managers should be able to control abuses.

Topic Expert
Malak Kazan
Title: VP, Special Projects
Company: ERI Economic Research Institute
(VP, Special Projects, ERI Economic Research Institute) |

Policies labeled "unlimited" often become based how those same policies are used by formal or informal leaders / top performers / change agents in the organization. How they are introduced into the organization and managed need to be deliberate in order to accomplish the intended impact on employee engagement and business outcomes, otherwise it can go awry quickly.

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

"Management sets the tone".

I've worked a few places where the execs considered themselves elite and behaved as such. Frequently saying it was no one else's business what they did and why they were away from the office so much. Frequently, everyone was aware that they were off playing golf or, taking a trip provided as a perk by a major vendor.

And yet, these same execs could never understand why staff acted the way they did. Things like refusing to work long hours or excessively calling in sick. Or, the ultimate act of retribution, resigning to take a position elsewhere.


Those places are where I developed this penchant for using that saying.

John Pustell
Title: VP and Controller
Company: TRI Ventures Inc (formerly known as Aque..
(VP and Controller, TRI Ventures Inc (formerly known as Aquent Inc)) |

My company's policy is you can take as much vacation as you want as long as your job gets done and you and your manager agree. I did not think it could work when I came here 9 years ago but I've learned - at least in this setting - that it works very well. My staff come to me with their requests AND explanations about how the job will get done while they are gone (including ususaly the approval/acceptance of their peers as to how they will help cover). There have only been 3 times in 9 years where I had to work with my ee's to modify the request - and only one outright refusal. My only issue is making sure the new staff take enough vacation (everyone needs a break.)

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

Seems like something similar to flex time. I think a lot of companies have moved that direction whether they realize it or not. Less and less rigor is put into tracking vacations or time off. It is all about getting the work done and realizing we are all connected 24/7. I think such a policy could work. If employees abuse it, they don't need to be on the team.

Melissa Patterson
Title: Financial Manager
Company: Servosity, Inc.
(Financial Manager, Servosity, Inc.) |

We have a flexible/unlimited policy at my work. It's a great thing and it's not abused at all. We have hard working employees and they know to get the job done. Having employees that are team players is the key. We're all reaching for common goals and they know if they take too much time off it will set back the whole company and potentially lose their job. It's been a great policy to have! I have noticed our employees will take their normal 1-2 week vacations and then personal days when necessary. I agree 100% with Mark - if they abuse it, they don't need to be on the team.

Jim Torpey
Title: VP of Sales & Biz Dev.
Company: InsynQ
(VP of Sales & Biz Dev., InsynQ) |

Agreed. My company has it as well, and it encourages people to work hard and then take time off when they need it and communicate openly about time they will be taking off. We have always stated that 'as long as work is getting done, you can manage your own vacation time'. But the truth is people seem to be taking less time off now and getting more done. So no abuse, and definitely a morale booster.

(Senior Accountant) |

I agree with Mark and Melissa. It appears to me that this is more ideal for both the employee and the employer as it encourages employees to perform well and take vacation and it protects the company from people who fail to report vacation.

My only question is how it works with hourly people? It makes sense if everyone is salary, but how does it work with hourly employee?

Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

It can't work with hourly people. At least not in CA.

You will run afoul of the law I assure you. It only takes one complaint to the DOL and a subsequent investigation. You will have unimaginable headaches as a result.

(CFO) |

it's interesting Bob, from a Silicon Valley startup, thinks unlimited vacation is OK. We are a startup too in the Valley. Most of our staff are engineers with PhDs. The work is challenging and interesting. Our policy is "take it when you need it". In reality, it's "take it when you can". It's worked out well. Most people will do the right thing. That said, if there is an environment of mistrust or "us vs you", it would likely not work.

Terry M. Cooney
Title: CFO
Company: New West Oil Company LLC
(CFO, New West Oil Company LLC) |

You can call a duck a Golden Goose, but it's still just going to quack and give you duck eggs. Management theory never ignores human nature. It attempts to channel it. Calling it 'unlimited' does not change the fact that there are consequences, and if any such policy actually exists without guidelines and a policy statement, then I suspect that it exists in a company that has de facto unlimited PTO to begin with.

Arielle Deakter
Title: Accounting and Operations Manager
Company: Blast Analytics
(Accounting and Operations Manager, Blast Analytics) |

Does anyone have any advice on how to set policy around this? We currently have a vacation planning document to help team members plan their vacations, but we're wondering how to communicate the unlimited policy -- what exactly does it mean to you? How do you monitor it? Does it also apply to hourly employees? Is the unlimited vacation paid?


Anonymous User
Title: CFO
Company: Local Government Agency
(CFO, Local Government Agency) |

Yes. I'd like to see this policy and have a chance to run it by legal.

If they approve of it, I'm going to seek unlimited compensation, health care benefits and life insurance coverage for myself. :-)

As it is, I have employees that take "late lunches" to go chauffeur their children to and from school. This is illegal for non-exempt employees in CA to start with. Even if the employee signs an acknowledgement that they are choosing to do this despite the requirement that they be provided a minimum half hour meal break if they work six or more hours. There is case law that supports this. It's on of those "you can't win" situations.

Worse, we have several employees that abuse this employee friendly policy! Although, they don't see it that way. They sit in the lunch room and eat their lunch at noontime and then "take their lunch" at three o'clock to pick up their kids from school. They think that because they remained on the premises while eating, it doesn't count as a "lunch break" and thus they are entitled to leave for an hour later in the day.

Other employees have noticed this and I know we're going to end up with a difficult situation because of it. I've warned the CEO who doesn't want to bother people about it.

Either everyone is going to start doing it and we're going to have staffing issues in the afternoons or, we're going to crack down on the abuse and that's going to create resentment and morale issues.

I think that those who say the unlimited vacation policy works are:

1) In unique situations;
2) Outside of legally defensible boundaries if they are challenged on it and,
3) A bit Polyannaish about human nature.

Just wait until they encounter an abuser and deny a vacation request or attempt discipline or terminate the abuser. They will have their hats handed to them. IMHO.

Topic Expert
Edward Abbati
Title: Vice President of Finance
Company: Location Labs
LinkedIn Profile
(Vice President of Finance, Location Labs) |

Just make sure you have caps on what can be accrued and carryforward; otherwise, you could have a huge liability on the books and large payouts when employees leave or retire.


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