The Truth Behind ‘Unlimited’ Vacation Plans

You’ve seen it in more and more job postings: Unlimited. Vacation. Sounds awesome right? Only about 8 percent of employers offer this perk, according to a recent survey from the Society for Human Resource Management. That’s up from 6 percent of employers, compared to the same survey from 2022. So did you find the holy grail of companies? Or is unlimited PTO too good to be true? Wharton School Prof. Peter Cappelli breaks down the real reasons why more companies are offering unlimited vacation plans.
Produced by: Jeff Morganteen
Editing support: Tim Hurt
Additional footage: Getty
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The Truth Behind ‘Unlimited’ Vacation Plans

[@edthelazyboy]

At my previous company, they switched to "unlimited vacations" and forced everyone to sell their accrued PTOs. That year I planned for 6 weeks of vacations upon hearing about the new vacation policy. When I was about to start my second two weeks of vacation, I got laid off. Apparently, my manager knew about my vacation plans and became upset so he chose me. Fortunately, my next job paid nearly twice as much and offered at least 4 weeks of PTO on top of company holidays annually.

[@trapbois4573]

Sad your manager did you dirty like that. However, sadly that is how corporate is, when a new company comes out, they have fantastic benefits to attract talent, once they are established the company slowly starts to pull back on benefits very slowly until they reach an amount where their employees still stay with them due to other benefits. Some corporate entities however go to far to reduce costs and that results in tenured employees leaving the company.

[@SuperCoolBoy0mg]

When you work in a high pressure environment, unlimited vacation means less PTO, or "team players" are less likely to take it out of guilt or obligation. If you work in a low pressure environment, or one where when you leave, someone else picks up your tasks - unlimited vacation may be possibly better than limited, because the employee isn't bound by obligation and guilt.

[@Brian-pq2mo]

I had an unlimited PTO company. Worst company ever when trying to take vacation. It was straight up a scam. Literally manager did not approve of the vacation, and when let go, not a single thing to be compensated afterwards. Only used 1 vacation day out of the entire year. Never again.

[@kikiiza3379]

You should have used more pto.

[@AndrewMalkin]

@@kikiiza3379 Sounds like they tried to

[@razorswc]

​​@@kikiiza3379pretty sure he is saying the manager would almost never approve PTO. Hence only one day he got of it. Kind of hard to use more PTO if the boss is almost always saying no.

[@jtworksoncars6341]

​@@kikiiza3379"Manager did not approve of the vacation", it's almost like they tried to take PTO/time off. Idk you tell me.

[@jobunaga4178]

​@@kikiiza3379the point is that you can't unless management approves it.

[@NovemberStreams]

I worked for an IT company with unlimited PTO. They handled it pretty well, using a calendar to keep track of who was off when. I usually took off 3-4 weeks/year, when it made sense for my projects. One negative I've seen with that system though is that approval for PTO came from one's project manager. If you had a well-organized PM, it was a great system. Some people on less organized projects had trouble being off because of risk-averse managers. "....no, you cannot be off due to this other team's change window, what if it goes wrong and we need you?" That kind of thing.

[@skyscraperfan]

Impossible that an employee in Germany would not take all of his 30 days of vacation.

[@r-uu2qi]

I think there should be a choice. Germany mandates PTO which makes companies less competitive. Many Americans don't agree with that

[@Coz131]

@@r-uu2qi Companies accrue liabilities on PTO that is not taken. The company should have a say. in AU more than 8 weeks of PTO is considered excessive and companies can ask you to take it. In some other countries, you can only carry over a certain amount of days.

[@satoshinakanodo6045]

In the U.S. I had to work for the same company for 10 years before I "earned" 28 days (4 weeks) of vacation time. A few months after my 10 year anniversary, that company laid me off. They said, sorry, we're re-structuring.

[@skyscraperfan]

@@r-uu2qi What sense does it make to earn a lot of money, if you do not have time to enjoy it. Even 30 days is not really a lot. It still mean that most of the time is used for work.

[@r-uu2qi]

@@skyscraperfan most corporations in the US do offer 30-40 days a year. It’s just not a government mandate like in Germany

[@ntsejfamyaj]

I worked for a tech company stating in 2012 that gave unlimited vacation time. For the most part, as long as you weren't on some performance plan and did a decent job AND business allowed it, you were approved for weeks or month long time off as needed. This included a 6 month parental leave. It wasn't bad at all with free food, free booze, etc.The last tech company I worked for starting in 2016 had limited time off, but had 1 year parental leave, which I took advantage of. That is crazy cool. Too bad, there aren't many companies like this.

[@skatetoexplorevideos2477]

Wow, that sounds awesome.

[@PK-xj5ml]

Sounds like your not still working for these places? Why not?

[@shuki1]

My company went to unlimited last year and most people have indeed taken more vacation days. Whoever had accrued vacation by us, those days are frozen until leaving the company but now I know that there is no way to accrue days anymore and some people used to do that to get a small bonus each year. For me, I've already taken several days over my regular limit, and no longer need to budget that strictly and I'm lucky that my current managers are cool about it.

[@NadiaSeesIt]

If it sounds to good to be true, it probably is!

[@seattlekarim964]

My company switched from time off to "unlimited". When they switched, they bought out our accumulated vacation days and that went a long way to me being okay with the change. I still take about the same time off as before.

[@kikiiza3379]

Is it unlimited paid vacation time?

[@bluepiaa]

Assuming you took less pto than you accrued, under your old plan, hence you were able to accumulate pto days. If you continue to take the same amount of time off as before, you're actually losing money. Your company came out ahead here. You need to take MORE time off to balance it out!

[@Omikoshi78]

@@bluepiaanot to mention when you’re terminated by choice or not. The unused vacation days will be be zero liability for the company.

[@blove2719]

@@kikiiza3379 Yes

[@cirquemagic]

It’s a scam

[@asheharris6642]

Unlimited vacation is never unlimited. You'll be lucky to be approved for basic amounts of time off. You'll mostly be bullied into never taking off or never getting your time off requests approved. There will always be an excuse. And if you attempt to use such a policy then you'll definitely be let go faster than other employees.

[@tsasa192]

An unlimited vacation plan is a scam. If the company laying you off they won't give you unused vacation pay

[@bperez8656]

Make sure to use it up then!

[@maddisonmad2710]

I challenge you to find someone with "unlimited PTO" that gets more than 30 vacation days a year. It's straight up a scam.

[@kikiiza3379]

Maybe. Ask on your socials? I know I will.

[@Thebubballoo682]

Haha me. 11 company holidays and 34 days of PTO already approved for the year. Might eke another week out around the holidays just to beat my last year's record.

[@notaseamonkey]

My GF averages close to that, but some of her colleagues have done it. Sometimes I worry that she could get in trouble or something, but she deserves the time off since she’s a hard working bee that’s not compensated enough and goes the extra mile for the company, sometimes even sacrificing part of her weekend or working late hours. Important to note that she plans ahead her PTO so that it won’t affect business and tries to overlap it with weekends and holidays to get the most out of it without abusing the system. To your point, her boss low key tries to dissuade his employees from taking too many days off.

[@shuki1]

I'm pushed 30 last year and some colleagues of mine have taken more. If you work normally and give managers value, and also know when to ask far ahead or take days off when there is less pressure, than it so far has not been a big deal. And in the two layoffs that happened this year by us, vacation days did not play a part at all.

[@JAlexanderCurtis]

I found you one, ME! I have unlimited vacation and I’ve taken 6 weeks (30 paid days) of vacation so far this year. I have one more week scheduled in November off. Plus i usually take the last two weeks of December off just because. So yeah it exists. I’m not unique either. I’m actually below average at my company, there are several people that take FAR more PTO than i do.

[@dacripe]

LIke it said here, it is an accounting perk for the companies. If you don't have an accrued vacation, PTO, or sick time when you leave, they don't have to pay out that amount based on their policies (like you get 50% paid out at your hourly salary when you leave - like a bonus). Unlimited is not really on the balance sheet, so they don't pay out anything when you leave the company. I have never worked for an unlimited PTO company, and kind of glad I have not. I got a big bonus check when I switched companies due to that PTO payout I had accrued. I use my PTO often, so it was not like I overworked. It is just companies that issue accruals today usually give you a ton per year (like I get 1 day every two weeks).

[@jblyon2]

I get a very generous amount of PTO. There is no accrual cap, and no use-or-lose policy. I also live in a state that requires that PTO balance to be paid out upon separation regardless of company policy. I'm able to take time off whenever I need to or want to while still building up a balance that will be a nice payday whenever I do end up leaving. It's honestly the main thing keeping me at a less than stellar company. I've always looked at unlimited PTO as a way for employers to get out of paying out when employees leave, and it seems to have gotten more popular directly in proportion to the number of states enacting laws requiring that it be paid. Many companies don't do it unless required to by law.

[@auro1986]

it means working from anywhere, including in vacation, with your laptop and phone

[@RantRantJoe]

NBC said most companies look at you, the employee as a liability; just a number on their balance sheet. So stop making work your life.

[@annetteslife]

Absolutely. We'll said

[@arun279]

on average it seems like when there's unlimited vacation time, employees take less than when finite amount of vacation time is provided.

[@minnesotajack1]

This is a fact.

[@alastairhewitt380]

Also, how can we fix these financial accounting concerns? Employees are ultimately hurt by trying to fix the balance sheet. Is there a way we can restructure our system, our society, so this doesn't happen. I hate that it isn't ever enough that we make a ton of money for our employers, but we simply alway need to make them more. While growth can be good we need to end this model that is 100% dependent on it.

[@jobunaga4178]

if the US mandated vacation time for employees like europe, then every company would have the playing field leveled. financial statements aren't totally useful by themselves. they become more useful when you can compare how the company is doing compared to its competitors.

[@rlamacraft]

Unions. The market economy is all about being a race to the bottom to bring costs down for customers and profits up for owners. Meanwhile, employees at each company get shafted because it's an easy way for management to find a competitive edge. If all employees across all the companies in a given industry refuse to work for such low conditions then management will have no choice but to accept it. Organised labour is the only way to ensure employees have power. Problem is, those costs then have to come from somewhere, and we all know investors wont take the hit, so customers pay more and inflation goes up.

[@vmoses1979]

Fascinating insight. Just underlines that no corporation does anything altruistically for its employees.

[@HolyHotSauce]

Bingo!

[@momo.maru-kun]

Unlimited vacations as long as the impossible quotas and deliverables are met

[@Lonjul]

Yep

[@depafeo]

Interviewed with a Federal Contractor company that had unlimited PTO. In their offer letter they required a minimum number of billable hours. after doing the math on 40 hours per week and holidays the PTO was really 14 days. Good times

[@eskimopie155]

Company culture around unlimited PTO is very important. We are encouraged to take as much time off as we want as long as we are getting our work done, and taking less than 3 weeks is viewed with concern. Finance expects all US employees will take 4 or more weeks off. Trusting that your employees will manage their time wisely goes a long way.

[@cirquemagic]

It’s a scam

[@Brigh578]

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[@Brigh578]

I agree , I assumed I had a hang of the market at first, I gained $50k one year and I was super elated, not until I stumbled upon a portfolio-adviser whose been guiding me since the market's been sham after the pandemic, to my utmost surprise I netted a whooping $360K during this dip, that made it clear there's more to the market that we average joe's don't know.

[@Brigh578]

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[@chrisjohnson7255]

So my company is pretty ok at this, I will probably break 160 hours of vacation time this year, I was scared to ask for time but now I realize how hard I work and that I need time off, and my manager respects that, we talk about it.

[@Trtevoorryu]

On the flip side I accrue too much PTO and it's hard to use it all when they only allow a small amount of rollover

[@RussellBeattie]

No one else noticed the typo in the thumbnail image? "Unlimted"?

[@Barca25644]

Brilliant observation

[@nestharus]

Unlimited vacation time is so good when none of your vacation time is ever approved =P.

[@kenthoover3573]

I have unlimited vacation at Honeywell, I’m an engineer with 1 year experience and use a lot of vacation without ever being questioned! I take 4-5 weeks a year and many coworkers take 8+ weeks way more than other companies allow.

[@redwhite_040]

Do you get salary when taking vacation?

[@kenthoover3573]

@@redwhite_040 yes 100% pay and benefits

[@oliviariley781]

When you have unlimited PTO you still get your regular salary checks when you are on vacation so yes.

[@redwolfexr]

Yeah, it works when you are on a big operational team and lots of people using it is job security in a way because the people at work have heavier loads. When you are in a very small team it is hard to take time, or a team that just took a layoff. If work loads are HIGH they can't spare you -- if work loads are LOW then you don't want to be laid off next. The thing was when its "accrued" you can claim it as OWED and the company even wants you to take it to get rid of the liability. Now? Yeah, if they can spare you for a few weeks they can probably spare you forever.

[@robertlunderwood]

I have 22 days of vacation that I'm not allowed to use.

[@jamesonpace726]

Thank goodness places like Wharton teach folks this stuff so they can get jobs so beneficial to the companies....

[@seancotter4610]

It’s the law in Europe and your encouraged to take time off. I get 35 paid days.

[@TheHilairetube]

*Vacation is there to decompress, have a break, recharge your batteries. That isn't luxus! If you don't get it, just see how much burnout cases you have in America! Stop thinking short term by being greedy.*

[@lordofthestrings86]

4 in 10 Americans not taking their vacation time is not “most.” Just sayin.

[@mrparkerdan]

At my government job, they cap you at 2 years of allotted vacation. If you want to accrue more vacation hours, you have to lower your balance first, by using some of your existing vacation hours. I have no money to travel, so I’m forced to take “staycations” at the end of every fiscal year.

[@PublixCarrotCake]

Years or months? Fed govt generally caps at 240 hours "use or lose". 2 years is over 4000 hours 🤨

[@mrparkerdan]

@@PublixCarrotCake every year, we get 15 days allotted vacation. 15 days = 120 vacation hours. so we can accumulate maximum 240 vacation hours.

[@redwolfexr]

"no money to travel" and "government job" don't go together. Not all travel has to be expensive, either.

[@kerri5595]

Yeah.....once I worked for a small biotech that claimed unlimited PTO. Absolutely NO ONE at the company took more than 3-4 wks of sick and vacation combined.

[@NightRidah777]

My company, big tech firm, did this. It is technically unlimited but you have to work it out with your team and manager to make sure they are short staffed. We still have sick leave days. I don't think it has anything to do with what this video is saying. It's a rounding error on these companies balance sheet.

[@vladrazym9955]

So is it UNPAID unlimited vacation they are talking about? If so - its not a vacation, as you are not being paid for this time off

[@iSucrose]

I receive a two-week PTO allowance, and if I stick around with the company for a while, it can go up to as much as four weeks. Honestly, I'd be content with just a month of time off; I don't really require more than that.

[@s125ish]

Only 2 weeks ? That’s nothing

[@iSucrose]

@@s125ishmost people don’t even receive paid vacation days in the United States.

[@PK-xj5ml]

​@@elperrroverdesound like you work mostly for a crappy companies. there's a lot of decent places where we average 40 days with holidays not including sick days for any non vacation reasons, kids sick, doctors, whatever. Tons of places start out at that 2 weeks. Almost everyone I work with is 10+ years invested with much with more time in.

[@Blaze6432]

​@iSucrose "79% of private industry workers had access to PTO benefits in 2021" -The US Bureau of Labor Stattistics. IDK why it was so hard for you to look up some elementary knowledge instead of making up stuff because your aren't educated.

[@Syae22]

Everything has a reason behind it

[@happylife7542]

Haha fun fact. Husband works for one offers unlimited vacation. And he took like 2 weeks so far this year. And I don’t think he will take more. Since he ain’t going to lose them. Vs me working for a great company with also great benefits. But I get max of 300 hr vacation. I can see that, and you bet I will be taking more than 2 weeks , or else my vacation will stop accruing when I hit the max. Just some personal experience 😂

[@thankgoditsfrida]

George Santos heard about unlimited PTO so he decided to make a cameo. 👀

[@akalina]

My company has unlimited vacation. I take between 30-40 vacation days a year without issue. It is awesome!

[@huckfin1598]

That’s clever

[@jesselee3391]

There is another angle to this - it is a recruitment tool to attract talent also.

[@jobunaga4178]

if folks really understood unlimited PTO, then they it would be a red flag, not a perk.

[@PSNDonutDude]

Jokes on Americans. My girlfriend had an unlimited vacation job and took around 5-6 weeks off per year. Still got all her work done, and worked from home. Was a dream job.

[@SaltySparrow]

Companies do it because a) they don’t need to track it and b) not pay out on unused days. Just make sure you take your days.

[@cirquemagic]

It’s a scam

[@jasondima1411]

I’m a truck driver. I don’t get that type of option

[@ohiorichkidbeats]

Sad but true

[@Lolo-330]

Juking the stats 😂

[@TomNook.]

if its not enshrined in law, it's not real.

[@Krobra91]

Many americans actually don't take vacation, and end up maxxing out and not accruing anymore. So while this is great and good to see companies moving towards this, many just dont utilize it. The Pandemic showed many Americans can work remote successful and productively, and that a 4 day work week is more productive. Problem is, many companies dont want to change the existing model that benefits the higher ups. for example, remote work brought workers to small towns with affordability and helped revive the small town locations, many were struggling for decades before. but with nwe people, higher wages, meant those small towns got more taxes to help rebuild roads ,bridges, local infrastructure, etc. now many are forced to go back big cities and live under cramped less than 700 square foot apartments and pay 5 times a mortgage they would have had.

[@saulgoodman2018]

Unlimited,. And unpaid.

[@KendoOCE]

Thumbnail says “unlimted” 🙂

[@SM-fm4eb]

Haha… unlimited vacation, you actually take up less vacations because you don’t force yourself to take vacation that you won’t lose, and beside liability, HR don’t have to keep track of any vacation hours or carry over for next year, and yes, unlimited vacation still NEEDS approval from your boss.

[@Blaze6432]

Can you show us the statistical analysis you performed to come up with that conclusion? Or did you just make it up because you aren't smart.

[@SM-fm4eb]

@@Blaze6432 no data, just consensus with peers working for company with unlimited vacation.

[@xquiroz223]

Yo necesito mis vacaciones

[@xquiroz223]

De Xiomara altagracia quirozyudyternoloyi

[@user-gx1tu5uf1t]

Oh yeah that 90k salary, sorry that was just a catchphrase.

[@ThePeterDislikeShow]

Maybe next we'll have unlimited salary where they give you a company bank card to spend on. Just budget wisely!

[@r-uu2qi]

30-40 days a year is enough. Unlimited sounds stupid

[@nishiljaiswal2216]

but most are not even taking 30-40 in unlimited pto

[@r-uu2qi]

@@nishiljaiswal2216 Yeah, that's my point. They claim unlimited, but would never actually give you unlimited. It's a lie. I'd rather accumulate them

[@Aubue]

Unlimited PTO sounds great, but it's important to remember that it's not a vacation free-for-all. You still need to manage your time responsibly.

[@enigmathegrayman2953]

Lottery is unlimited vacation

[@kikiiza3379]

You paid taxes on lottery winnings. Educate yourself.

[@enigmathegrayman2953]

@@MrJoeSomebody Thank you!

[@4.0gpa44]

On average, virtually everyone looses the lottery. That's how the lottery stays in business. The lottery is a vice that destroys people and families.

[@TheShorttii]

Lol “unlimted”. Some strong proof-reading going on at CNBC for that to make it into the giant, all-caps header text.

[@annetteslife]

My brother, by choice, who works for a company for over a decade, has so much vacation pay because of not going on vacation and that is by his choice

[@NicholasNerios]

Basically a legal lie employer's offer.

[@alastairhewitt380]

Everyone should be entitled to 6 weeks paid holiday minimum. White collar workers should only have to work 12 hrs a week and have 12 weeks paid vacation minimum at this point. Our productivity has exploded since the 1950s and even more so in the years prior to that. It is time we value our time & our lives, but because of optics & politics we are working more than ever. I am lucky to get 1hr a day of productive work done. The rest of the time is spent in useless meetings, effectually I have a 5 hr workweek, if that, but I clock in 40 hrs because employers refuse to adapt to this new reality and employees feel a need to put on a bs show. I would much rather work my 12 hrs a week in a concentrated & focused manner than work 5 hrs a week and then spending 35 hours pretending like more work got done. We can increase productivity further by decreasing hours if businesses would simply invest in and trust their employees and attempt to cut down on optics & office politics.

[@PK-xj5ml]

No offense but...12 hours? Really what kind of work do you do where you can accomplish it in 12 hours or 5 as you said. That sounds like a job that could be easily replaced or should be outsourced or contracted out to a place who handles that work for multiple places.

[@christopherhawkins7068]

My experience is no one respects your pto at unlimited pto companies, you get pinged all the time bc it’s technically “unlimited”…

[@NK-iw6rq]

Its a cold world out there people. Earlier this year there were multiple people who had 15+ years at a company like Google or Microsoft laid off. I recommend becoming an influencer or start a youtube channel, because the best boss you will ever have is yourself.

[@user-pr2qk2lm2h]

“Unlimted”

[@Stranger--]

Update your thumbnail *unlimted*

[@Shadow_Banned_Conservative]

Unlimited vacation is a myth, you'll be lucky to get as much time off as you did before the conversion to DTO. Been there, done that.

[@carystevensky]

All to destroy the middle class!

[@AarenIgnazio77]

#wfhforever is better!

[@paradonym]

You still have to do your job and it's projects in time. No matter where you are

[@yostevedotcom]

I would take Friday off and do work over the weekend or in my 4 day week. I can leave early, as long as i get my work done I'm all for it. Currently I'm salary and I am stacked with work that I do off shift but my company isn't flexible. They'll make me work Saturday but then nickel and dime me on time off. This would be great.

[@scott83gmail]

This guy is beating around the bush. Employers have been lying to employees and stealing from them for 100's of years. It's only getting worse. This is just another one of their many scams.

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