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Lately I am seeing work offers from many companies, and I often found companies based in the US state Unlimited holidays as part of their perks.

During the interviews I asked about this, and they say it is like that. I can take any amount of holidays I want and they are paid.

Then they always make an example: Yea, if you wish you can take a week off and go travelling. Many people in the company are travellers and take one week of for travelling. So cool! Now, coming from an European background and being a hardcore traveller, for me one week off a year for travelling sounds like a walk to the nearby park.

I would like to know if someone, if possible someone who worked previously in European companies in order to be able to compare, can tell me how this in practice works. I do not believe it works as described. Otherwise most of people would be on holidays every day. Wouldn't they? I guess there must be some mechanism to avoid people to take those unlimited holidays. And that's what I am interested in finding out.

Peter Mortensen
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Worker
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9 Answers9

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"unlimited holidays" is not a benefit. It's usually a red flag. I know one Senior software developer who had unlimited vacation and they made him feel guilty for just taking three weeks of vacation after one year.

It's also a way for an employer not to pay you for unused portions of your vacation should you get laid off or you quit (should you happen to be in a State that requires employers to pay off unused vacation).

Be careful. The only way to double-check how much vacation you'll be getting is to make sure to interview your future team members. Ask them how long they've been working for the company, how much vacation they've taken in practice, and how much vacation they've actually taken their first year. They'll tell you the truth.

And while you're at it, ask them how many hours they're working on average as well. Or if you can't pin them down, ask them how many hours they've worked last week.

Just be careful who you ask, the amount of vacation you get or the hours you work will heavily depend on your own manager and on the type of work you do. For instance, if you're applying for a software developer position, it would be useless to ask HR, they'll either lie to you or talk about their own vacation/hours which would be useless to you either way.

Stephan Branczyk
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    As a counterexample, my job comes with 'unlimited holiday' and in practice this means ~40 days a year. So it isn't necessarily a red flag. But asking a current employee is a certainly a sound idea. – K-- Nov 23 '19 at 12:59
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    In the US? 20 days official PTO is on the generous end. – David Ehrmann Nov 23 '19 at 23:07
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    It's possible I think. A lot of it depends on your seniority, type of work, if your work has peak periods that are seasonal, and/or if you're blood-related to your boss. – Stephan Branczyk Nov 24 '19 at 02:02
  • Mine comes with "unlimited PTO" as well. I've taken 28 or so days off this year (including a 12-day stretch and a 6-day stretch, not counting weekends), and not had any troubles. Multiple people (manager, HR manager, and others) have confirmed that as long as I'm getting the work done that I'm supposed to, they don't really care how much time I take off. – Doktor J Nov 25 '19 at 00:04
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    All non-standard concepts and even some standard concepts can be easily abused. AGILE methodology can translate to "You go to meetings every week and get told to do things faster". Don't fall for buzz words. Figure out exactly what those terms mean for this company. – Nelson Nov 25 '19 at 03:05
  • @Doktor So what happens if you get so much additional work that you can only take 5 days a year off? Can you say no to additional work because you wouldn't get enough time off? Seems rather easy to abuse. – Voo Nov 25 '19 at 10:39
  • This sounds horrible! Won't there be tensions in many organizations when one team member negotiates 30 days off, others only 20 etc? – smcs Nov 25 '19 at 10:44
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    @smcs the idea is that the employees guilt trip each other into taking the bare minimum of holiday. Like a union in reverse. – pjc50 Nov 25 '19 at 11:51
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    @Voo if there were that much extra work to do on a regular basis that one could never take off more than several days in an entire year (not counting company holidays), we'd hire more people or find ways to redistribute the workload. Maybe my company is an outlier, but it values its employees and tries to prevent burnout (which we are acutely aware is a legitimate threat in our industry). It probably helps that it's a relatively small company (< 50 employees) and everyone knows everyone else -- quite literally. – Doktor J Nov 25 '19 at 21:13
  • @Doktor Sure that's currently so, but you have no guarantee whatsoever that new management (small company bought by bigger one? not the first time) doesn't take over and changes the policy. That's why I prefer my contractually guaranteed 5 weeks vacation. If I need more, there's no problem to talk with my boss, but at the very least I'm guaranteed a specific amount. – Voo Nov 25 '19 at 21:36
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I work in a company (~50K Employees) where we have an "unlimited" PTO (paid time off) policy. For us, requests for vacation under 4 weeks a year only have to be approved by our direct supervisor. Then, for every week above that, the request has to be approved by another level of management.

This is my second year at this company, and I've never experienced any pressure to not take the whole 4 weeks (I took 2.5 weeks the first year and 3 so far this year). In fact, my coworkers almost always take at least 4 weeks. I've heard of at least one person taking above 6 weeks, but they had medical issues in their family. Everyone is "encouraged" to take at least 2 weeks per year.

So, implementation definitely varies from company to company in the US, and it's not always a red flag.

However, always check with potential new coworkers to get a good feel for what any particular company's policy really is.

NateTheGrate
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The main difference between unlimited and regulated European holidays is this:

  • In many parts of Europe you HAVE to take some or all holidays. In some European countries you even have to (by work law) take 10 working days in a row (so that create a 16 days holiday including weekends).
  • In the unlimited case there is no upper cap, but there is usually also not a lower one. So there is no rule "You need to take a week off in a year". So you can be constantly manipulated/bullied into not taking vacations during crunch/hot season/black Fridays/deadlines and so on. (as my friend once said "You like warm beer and sweaty women? No? Then you'll go on vacations in November"). You have much less control over how many days off you have and when.

From a company point of view it's like those open cinema tickets or gym memberships. Of course there will be some people who will get more than they paid for. But most of the people would pay for service that they will never use. And this is the situation where companies profit from.

gerrit
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SZCZERZO KŁY
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    In Europe you HAVE to take the holidays, that's a bit over-generalised. In the UK I certainly had colleagues who didn't take their holidays, and I was unable to take all of mine near the end of my last employment (they were not approved) and got them as extra pay instead. – gerrit Nov 22 '19 at 19:41
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    So there is no rule "You need to take a week off in a year" For what it's worth, there are some industries in the US where that is required. – dwizum Nov 22 '19 at 20:48
  • Maybe relevant: in a lot of businesses, what happens on the days surrounding Black Friday can make or break the year for them, and a lot of devs and similar personnel who are not otherwise on call are effectively on call at all hours during that period. Obviously they'd rather you not take vacations then, but you might prefer to do so. Working in a place with "unlimited time off" might restrict your actual ability to do so, as opposed to a place with a clear policy, where it's more clearly within your right to do it (assuming they haven't said "you can't take vacation around that time"). – Backgammon Nov 22 '19 at 22:05
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    @gerrit If your employee won't force you to go on holidays (for example last year allocated) THEY could face a fine. In Poland you HAVE to take 10 days in a row. – SZCZERZO KŁY Nov 22 '19 at 22:49
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    @schil227 That his vacations were never approved for his chosen summer time but he was told he can go in November. Presented by an upper management as a form of "caring" for him. For example they told him once that he will save money if he go off-season. – SZCZERZO KŁY Nov 22 '19 at 22:51
  • I'd note that "unlimited holidays" also tends to mean your PTO is only considered over a year period and you either use it or loose it for that year. For employment where there's a set number of weeks of vacation per year, payment for those weeks is considered part of your compensation. You can usually accumulate the PTO up to a max number of years, commonly two or three years (unused is either lost or paid). If you leave the company, payment for your unused accumulated PTO is owed to you. For "unlimited" PTO, its commonly not something you can accumulate, nor is it paid out upon departure. – Makyen Nov 22 '19 at 23:04
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    @SZCZERZOKŁY gerrits point is that people far too often say “in Europe...” when they really mean specific countries within Europe - even the EU doesn’t have rules requiring all employees take X amount of holiday a year, just that a set amount of paid holiday is offered, employees are allowed to take them and in some cases roll them over to the next year or receive payment in lieu. People need to stop saying “in Europe...” because it’s meaningless and almost always a wrong blanket statement. –  Nov 23 '19 at 04:00
  • @gerrit Here we have a mandatory minimum of 11 week days per law. The rest can be paid in money with the agreement of both parts. We only can roll them over into the following year till the next 1 of April. – Rui F Ribeiro Nov 23 '19 at 12:37
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    I understand that in most of Europe (EU countries? is it an EU law?) the employer has to offer the 'opportunity' to take at least the EU minimum which I think is 20 days (4 weeks). Of course what that means in practice is open to debate, as the employer could easily argue that they offered the opportunity throughout the year but the employee left it too late and then requested their holidays in November or whatever, so it isn't actually clear cut. I (UK) have lost days to this more than once, although not at my current employer. – seventyeightist Nov 23 '19 at 20:47
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    @Moo the directive specifies that EU states will ensure workers are entitled to at least 4 weeks annual leave, which can only be taken as money upon termination of contract. As such, the local law is harmonized with the directive, and I would be very interested to know, which EU state didn't comply with it. – Gnudiff Nov 23 '19 at 23:48
  • @Gnudiff that still doesn't require workers to take the holiday, and it's commonplace in the UK to roll over holiday and take it as payment in lieu with agreement between employer and employee. –  Nov 24 '19 at 01:19
  • I for one can't wait until the concept of "unlimited salary" gets introduced to the US. I look forward to re-negotiate what my salary is going to be after-the-fact every time I ask for my paycheck. /sarcasm – Stephan Branczyk Nov 24 '19 at 22:26
  • @Moo some countries and/or contracts require a 2 week contiguous vacation to be taken during a specific period. I've had such a contract. Idea being that such a period is needed to "recharge" and be ready to face the grind for the rest of the year. Of course the same company then booked me solid with customers for that entire period so I couldn't actually take the vacation or the customer work wouldn't get done, leading me to loose the days at the end of the year. – jwenting Nov 25 '19 at 04:37
  • @jwenting seriously, I’m not disputing that, I’m disputing the freaking blanket statement of “in Europe...”, it’s that simple. The original post said “in Europe...” and has since been edited to be less blankety. –  Nov 25 '19 at 04:41
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    @Moo I agree with you, there are too many Americans who believe the EU is a country like the USA. However, the US have 0 PTO required by law. There is no country in Europe where that is the case ( https://en.wikipedia.org/wiki/List_of_minimum_annual_leave_by_country ) – Pierre Arlaud Nov 25 '19 at 09:42
  • @PierreArlaud the original issue was not about how much PTO is available by law, the claim was that “In Europe” the employee had to take some or all of them them by law. That might be the case in some countries, but as a blanket statement it’s wrong. –  Nov 25 '19 at 09:46
  • @Moo in Europe. As in whole Europe (not only EU) you have MANDATORY holidays. It's in the RIGHT of the employee to not take them (not "they allowed to not take them"). And if they don't take them the EMPLOYEER have to prove that they enabled employee to take days of. If they cannot show that (for example "hello X, you have 20 days of holidays accrued from last year, please go on vacations") then they fine. It's not from EU leglislation but a good old communist law. – SZCZERZO KŁY Nov 25 '19 at 09:58
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    Minimum consecutive holiday is an anti-corruption measure; if you have a scam going, two weeks is often long enough for it to fall apart in your absence. – pjc50 Nov 25 '19 at 11:52
  • @pjc50 And, here's an example – Chronocidal Nov 25 '19 at 13:43
  • @Moo In certain industries (e.g. Financial Services), minimum leave per year is a mandated Regulatory Requirement, for exactly the reasons that pjc50 lists above. A friend of mine, who worked as a Bank Manager was able to catch and prosecute a member of staff who was cooking the books, in part because everything added up correctly during their mandatory 2 week break. – Chronocidal Nov 25 '19 at 13:51
  • @SZCZERZOKŁY sorry, that still doesn’t validate the original claim that the employee has to take the holiday, just that an amount of holiday has to be available (which isn’t in dispute). Face it, the original claim was wrong. –  Nov 25 '19 at 16:06
  • @Chronocidal again, still doesn’t validate the original blanket statement. I used to work in one of those industries myself, but it doesn’t justify the broad claim. –  Nov 25 '19 at 16:07
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Unlimited PTO can be great, or it can be terrible - it completely depends on the culture of the company.

The main upside for the employer, however, is that they do not have to pay out vacation when you leave. In California (where this concept originated), the law is very clear that employees accrue vacation with each paycheck, and that it is an asset that they must be compensated for when they leave.

With unlimited PTO, you have not technically accrued any vacation, so there is nothing to pay out upon your departure. That can mean 2-4 weeks of salary that the company saved.

JasonB
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    Also the personality of the employee. Some people are less likely to take time off when it's always available. I personally fall into this bucket. I've had unlimited time off at a few jobs, and it always turns into extending Christmas and Thanksgiving breaks, family obligations, but no proper vacation. – David Ehrmann Nov 23 '19 at 23:10
  • yeah. And many company cultures are such that people are afraid to be seen to "slack" because it's likely to get them passed over for promotions/raises and put on the shortlist for the next cycle of layoffs. I've worked in more than one company where employees were afraid to use their contractual vacation days, and even were afraid to take time off for serious health problems, as it would get them flagged as "not being good employees", and this was a period where many people were let go every month. – jwenting Nov 25 '19 at 04:40
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I worked for a company with unlimited vacation time a about a decade ago. The policy was similar to NateTheGrate's answer -- depending on the total amount you take each year, it has to be approved by a higher level of management.

The important thing to understand is that you can't really take off an unlimited amount of time -- you still have to do your job. So your manager and the higher-level managers will try to determine whether you'll be able to achieve your goals in the time remaining, when deciding whether to approve the time off.

A better description of it would be flexible time off. It replaces a one-size-fits-all system, where employees all get a specific amount of vacation time each years, usually with a policy that the amount increases as your tenure at the company increases (e.g. 2 weeks the first 5 years, 3 weeks the next 5 years, etc.).

Besides being more convenient for employees, this also makes record-keeping simpler. HR doesn't have to keep track of "banked" vacation time across multiple years, and the company doesn't have to have policies about how much can be banked, how long it persists, etc. Meanwhile, when deciding whether to approve time off, the manager can still take into account that you didn't take off as much time in a previous year.

The flexible systems also tend to conflate different reasons to take time off: vacation time, family leave time, medical leave time. I'm not sure how this works in states that have instituted laws requring employers to provide a minimum amount of medical and family leave time.

Giacomo1968
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Barmar
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  • I think this is the best answer in terms of describing how it practically works in most cases. Although, as with any policy, unlimited PTO can be abused, the intent is not inherently to bully employees - rather, the opposite. It's to empower employees to take the time they need or want, provided they can still perform their job duties. When it's implemented with good intentions, it's a powerful tool and helps employees feel like they are in control, instead of applying a blanket rule to everyone, no matter what. – dwizum Nov 22 '19 at 21:02
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    It's also helpful when you're laying off someone, or when someone gives their notice, because then you don't have to pay him for his unusued vacation days. – Stephan Branczyk Nov 22 '19 at 23:05
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    @dwizum, "(e.g. 2 weeks the first 5 years, 3 weeks the next 5 years, etc.)" You can rationalize it anyway you want it, but if these figures are average in the US, this so-called "unlimited vacation" means that you'll be getting one less week vacation after 10 years than someone in Europe who is starting their first year with a company. – Stephan Branczyk Nov 22 '19 at 23:09
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    @StephanBranczyk The fact that European vacation policies are generally far more generous than US is a whole different issue. – Barmar Nov 22 '19 at 23:11
  • And even in companies with unlimited vacation, you'll need permission from someone really high up to get European vacation time. – Barmar Nov 22 '19 at 23:12
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    @Barmar, It's not the amount of vacation that I'm objecting to, it's the lack of transparency and the potential for false advertising/bait & switch that I'm objecting to. – Stephan Branczyk Nov 22 '19 at 23:18
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    @StephanBranczyk Those numbers are typical for companies that don't have unlimited vacation -- I was describing the traditional system that it replaces. – Barmar Nov 22 '19 at 23:18
  • Let us continue this discussion in chat. – Stephan Branczyk Nov 22 '19 at 23:20
  • The record keeping doesn't necessarily have to be simpler. In Poland for example it's illegal not to take the required amount of vacation for consecutive years. If you don't take enough days off on your own, the company is obliged to pick them for you. – BartoszKP Nov 24 '19 at 21:56
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As others have noted, this is perhaps a more common feature of software engineering jobs. I would say it works because engineers already tend to have a lot of flexibility with scheduling and how their work is evaluated, not to mention variance in the perceived value + volume of work performed by each person.

What prevents someone from taking a 3 month sabbatical every year? Well, reviews. It's pretty hard to do a full-time position's worth of work in 9 months, and your boss will let you know that you have fallen well short of expectations at review time (or just in your regular 1-on-1 meetings). So, in a sense, if you take an excessive amount of vacation, the company will extract the cost from your bonus, your potential raise, and your career advancement. In this way, employees and their managers can make personalized judgments about an appropriate amount of leave and how that should reflect on the total value delivered in a year.

In many companies, this policy is just a formalization of a practice which happens anyway: engineers can often take time off when they need to, modulo getting stuff done. Accounting wants to know how much time everyone takes off, because when you explicitly allocate a certain portion of compensation as vacation time, accrued vacation becomes a legal liability which must be paid upon termination. But if most folks take most of their vacation every year, and both managers and employees have no disputes about the amount of vacation, then this is just unnecessary overhead.

I've known employees that only take 1-2 weeks off, and others that take 5-6 weeks, with no negative impact on their careers. The important point is that strong contributors are often given more leeway than weak performers, for obvious reasons. Nobody will get fired for taking too much vacation, but if a manager perceives someone to not be pulling their weight and taking too much time off, they will try to manage that person onto a less desirable team, with an attendant loss of career promotion value (and often other compensation).

Despite claims of the existence of "10x programmers", I've never seen anyone take 45 weeks of vacation because they were that much better than everyone else. I would say 6-8 weeks would be pushing the boundaries of what most engineers could get away with, possibly at some risk to their career/compensation.

Lawnmower Man
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  • "Despite claims of the existence of "10x programmers", I've never seen anyone take 45 weeks of vacation because they were that much better than everyone else." I'm imagining someone who comes in for one day each two-week sprint cycle and then takes the rest of the sprint off as paid vacation days... – nick012000 Nov 23 '19 at 08:37
  • @nick012000 the 10X dream is software engineers who are simultaneously (1) so smart they program 10X their peers but (2) so dumb they take home 0.10X their peers. – emory Nov 23 '19 at 15:15
  • I like this answer because it hints at the idea that "unlimited vacation" policies often lead to more productive members being able to take more vacation days than less productive members. – Jacob Horbulyk Nov 25 '19 at 15:11
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Like so many other things in a workplace, the answer is "it depends". Netflix was one of the early pioneers in the practice of unlimited PTO. An interesting listen is an episode of NPR's Planet Money podcast from a few years ago: Hard Work is Irrelevant

Basically, Netflix offered unlimited time off... but no guarantee that your job will wait for you if you take it; because we're a business and we've got things to do while you're off traveling the world or getting surgery.

spuck
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  • Only in the US: getting fired for getting surgery that's arguably a sensationalist misrepresentation of the state of US employment law with respect to medical leave. There are plenty of regulations that provide protection for your job while you are receiving medical care or caring for others in your family who have medical issues. A podcast about one employer who tried to find a way around those protections doesn't condemn the entire system. – dwizum Nov 22 '19 at 21:00
  • @gerrit That doesn't happen. We have legislation called the Family and Medical Leave Act that forces employers to grant you job-protected -- but unpaid -- leave for certain circumstances (including illness) for at least 12 weeks as long as you've worked for them full time for at least 12 months. This is in addition to any paid leave in your contract. It is strictly enforced. – Bloodgain Nov 22 '19 at 21:03
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    I did not mean to imply that Netflix was firing people who took time off for surgery; I apologize for the inference. The reason I included a "medical" leave in my answer is that usually a company who offers "Paid Time Off" or "Personal Time Off" does so as one pool of leave; there is no distinction between vacation time and sick leave. – spuck Nov 22 '19 at 21:16
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    @dwizum Thank you for the correction. – gerrit Nov 22 '19 at 21:22
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    @Bloodgain Ok then, I must have misunderstood at-will employment, if there are still some legal protections. Good to know (although going unpaid during this entire time is not great, to say the least). – gerrit Nov 22 '19 at 21:24
  • The "unpaid" component only kicks in after you've exhausted other (protected) channels. This usually means being allowed to take their maximum PTO (while fully paid), and for your own medical leave, potentially exhausting both short term and/or long term disability (which may mean you are full paid, but at least partially paid). The details depend on a number of factors, but as an example, I have an employee on medical leave right now who is essentially receiving 3 months of fully paid time while her position is legally protected, with the option to extend with partial pay for another 3 – dwizum Nov 22 '19 at 21:28
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    "at will" employment is often understood to mean that you can be fired for anything. What it really means is you can be fired for anything that's not illegal - and people often forget the pile of illegal things! Essentially what it boils down to is closer to without cause in the sense that the employer is not strictly required to make a case that they have specific cause to fire you. – dwizum Nov 22 '19 at 21:33
  • @gerrit no no no, America would never do a thing like that! We're talking purely optional procedures like cosmetic surgery or having a baby. – Harper - Reinstate Monica Nov 23 '19 at 23:24
  • @Harper-ReinstateMonica Stop fear-mongering. Pregnancy and maternity are strictly protected under FMLA and other legislation. And while paternal leave is not mandatory, maternal leave most certainly is, and it must be paid. Paternal leave is covered under FMLA, you just aren't guaranteed paid time. I interview people for my company, and we are told in no uncertain terms to ignore whether someone is pregnant or even if they mention they're thinking about having kids, as it's considered discrimination to consider that. If it's discrimination when hiring, it's discrimination when firing. – Bloodgain Nov 24 '19 at 06:31
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It varies company-to-company. Check the "fine print" so to speak; find out the process for requesting and approving vacation time, talk to employees about how they feel like vacation time affects their status and pay, that kind of thing.

It's instructive to note that the place where I work toyed with the idea of unlimited vacation some years ago when it was all the rage at tech companies, but say they rejected it because (according to the HR VP) studies led them to expect that failing to track vacation days overall decreases the amount of vacation time actually taken, leading to a more-stressed, less-productive workforce. Instead, the company went with a policy of X vacation days per year which require no approval to use, along with explicit encouragement to use it all rather than accruing too large a surplus. Plus you can drive your vacation balance slightly negative with no approval required, and severely negative with approval from your immediate management chain. For the most part people seem to be happy with that.

On a related note, this company does offer unlimited sick time, which I've found to be a really positive signal. The idea is that sick time serves a very different purpose. If an employee is sick, then they should stay home; no calculations or accounting should be part of that decision.

tylerl
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  • When you say unlimited sick time, is that paid? – kvsm Nov 25 '19 at 16:57
  • @kvsm Yes. It's "normal" PTO up until you reach the threshold for short term disability coverage, after which that's the policy that kicks in. Again, the objective is to encourage a healthy work-life balance. It's relevant to the "unlimited vacation" discussion in the sense that direct wellbeing maintenance is an appropriate place to deploy "unlimited" policies, such that they have the desired effect, while unlimited vacation time tends to be counterproductive. – tylerl Nov 26 '19 at 06:39
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In one sentence, "unlimited vacation" means: vacation at the discretion of the company.

  • Every single unlimited vacation policy comes with some sort of approval scheme over which you will have no control.

  • All the "benefits" of it like flexibility and simplified timekeeping actually benefit the company, not you. Don't expect your manager to remember that you didn't take any PTOs two years ago when you come to his desk today asking for 5 weeks. And if you get a new manager, don't expect him to know how many days you took this year.

  • If your company is going through a rough patch, expect to get little vacation and feel guilty about taking it.

  • In case of layoffs, you can be sure to get fired just before that big vacation you have planned.

Dmitry Grigoryev
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