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.

[@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.

[@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.

[@skyscraperfan]

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

[@NovemberStreams]

I worked for an IT company with unlimited PTO.

[@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.

[@NadiaSeesIt]

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

[@tsasa192]

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

[@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.

[@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.

[@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.

[@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.

[@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.

[@auro1986]

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

[@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).

[@momo.maru-kun]

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

[@Brigh578]

I began investing at the age of 37, primarily utilizing my hard work and dedication. Now at the age of 44, I am delighted to share that my passive income exceeded $100k for the first time in a single month. This advice is truly valuable, so don't hesitate to take action. Remember, it's not about achieving wealth quickly, but rather about building wealth consistently and persistently.

[@arun279]

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

[@vmoses1979]

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

[@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