The Pros, Cons, and Policies of Unlimited PTO

In several Facebook groups of which I am a member, there has been quite a bit of conversation about unlimited PTO (paid time off).

We had it. Then we severed it. Then we brought it back.

We severed it because former colleagues took advantage.

(No, you can’t take three months paid to prepare for your move and another three months paid after your move. That’s why we’re virtual. You can work from anywhere.)

We brought it back because *I* want unlimited PTO. And if I get it, it’s only fair everyone else does, too.

Today we have two rules: Only one of us can be out at the same time and your time off must be unplugged.

(Last summer, three people were out at once, and I worked a 130 hour week that week. Learned that lesson!)

As well, I will deactivate your email and Slack until you’re back if you can’t abide by the second rule. I have admin access and will use it!

As a business owner, I love unlimited PTO.

We don’t have to worry about tracking how much time you’ve taken, when you’re out of time or deducting pay when you go over, or the year-end rush to use up earned vacation time.

That’s dumb.

Just like it was dumb that I had to clock in by 8:30 every morning at my previous job, no matter how late I was in the office the night before.

Dumb.

We work in a service business with grown-ups.

I’m big on treating people as such.

(Unless they take advantage such as a six-month vacation to move to a new house.)

What is Unlimited PTO?

The concept began to be batted around about five years ago when virtual teams became more common.

The idea is that you can take off as many days as you need for things such as vacation and illnesses.

No, the idea is not that you take a six-month sabbatical (that’s a different benefit often offered to tenured employees).

The idea is that, rather than say you have 15 paid days off (not including holidays), you can take what you need.

For instance, early in my career, my apartment burned down.

The guy who lived above me was roasting a turkey overnight on his deck.

The coal grill caught the wood deck on fire, and the whole building burned down.

I woke up to three firemen coming in through my bedroom door (which would be fun in any other circumstance).

My company made me take vacation time to, you know, start my entire life over again.

I ended up not needing more than three days, but I have never forgotten how that made me feel.

If someone’s home burns down, I don’t want them to have to worry about whether or not they have the accrued vacation time to take.

Please deal with it. Come back to work when you’re ready.

There are lots of things in life like that — the things we have zero control over — that shouldn’t require us to take unpaid time if we haven’t accrued vacation time (or have already used it all).

The Pros of Unlimited PTO

There are so many pros of unlimited PTO.

• People come back refreshed, reinvigorated, and creative. You do have to force unplugged time off for that to happen. Add it to your policy (see below).
• It fosters a sense of trust in your team.
• It encourages a culture of responsibility because people have to think about who will cover them while they’re out. They also look at how it affects the larger business, as a whole.
• You can include it in your recruitment package as a benefit. Studies show, those who have it, rank it just below health insurance and 401K.
• If you have an office (this is less a problem for us), it’s more likely people will not come to work while sick. I don’t want your germs! Stay home! But lots of people hoard their paid time off for vacation. Rarely do they use it while sick. Of course, being a virtual company, hardly anyone takes sick time (I did in February when I had the flu so bad I nearly died). You can easily work from bed if you feel up to it.
• You don’t have to track accrued days against taken days. People can just take the time they need.

The Cons of Unlimited PTO

With the many benefits comes the dark side.

• It’s possible someone will want to take a month off to hike Everest (me, me!), which could be a real issue for your organization. Your policy needs to state what is appropriate and what is not.
• More than one person could be out at the same time, requiring the CEO to pick up all the slack (cough, cough).
• You do still need to track to watch for abuse — and to prove compliance with regulations, such as family and medical leave and disability coverage.
• You have to force people to take time off. One would think this is a pro, not a con. But there is a different mindset people have when they know they can take the time. Last year, I had to tell Corina Manea that she was not getting a raise until after she took at least a week off.
• Employees may feel like they can’t take more time than the typical 15 days. They may feel like they’d be judged or perceived as a non-team player for doing so. To change that, it has to start at the top.
• Some colleagues may take advantage. And not in the long weekend here or there way, but in six months out of the year to move to a new house way. The good news is that when someone takes advantage, it’s an early warning signal that something else is wrong.

What to Include in an Unlimited PTO Policy

The unlimited PTO policy doesn’t have to be overbearing or overwhelming.

It should include the following:

1. Figure out what to call it. Some experts say unlimited PTO is the wrong phrase because it’s not unlimited. It’s not like you can take six months’ paid time off to move to a new house. Perhaps it’s something along the lines of flexible time off or a work/life balance policy.
2. Tie to your core values. First, this only works if the CEO takes time off. If he or she doesn’t abide, no one else will. In our industry, it’s easy to tie performance to goals. If the person isn’t meeting their goals, they don’t get the benefit of unlimited paid time off.
3. It’s a two-way street. This means your team must think about how their time off affects the rest of the organization. Do they need to appoint someone to fill in while they’re out? What can they do to prepare that person or people? Is it the busiest time of the year and someone wants time off? When you shift your culture, they begin to think about these things before asking.
4. Clear guidelines. Just like we have the two rules, your guidelines should be very clear. You should tell them how to request time off — and be clear that just because they ask, doesn’t always mean it will be approved. It should also include how you’ll handle things such as disability, medical, or family leave. Typically those things don’t fall under unlimited PTO but would follow state and federal laws. Be clear and don’t leave people guessing.
5. Butts in seats don’t matter. I’ve long been an advocate of a policy that allows for my team to take care of our clients and get their work done — from wherever and whenever they like. Of course, we have to keep normal business hours, but if they want to take client calls from the beach, so be it. An unlimited PTO policy shows people you’re more concerned about results than about their time in the office.

Do You Have Unlimited PTO?

Now it’s your turn.

Do you have unlimited PTO? What works and what doesn’t work?

Originally published on Spin Sucks.

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