Here’s the Lowdown on Unlimited Vacation Time and How to Really Use It

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When I first moved to the U.S. from Europe, I was shocked to learn that businesses were not required by law to offer their employees paid vacation time.

I grew up in England and Belgium, where paid time off was treated like a right that employees were encouraged to take advantage of. Here in America, it seemed like the opposite was true; at least at the companies where I worked.

Tess Taylor from The Balance reports the average American employee gets 13 vacation days and eight paid holidays per year, compared to the average European who gets 20 vacation days and 13 paid holidays. I always wondered why the American mentality was so different when it came to taking time off.

In the last few years, however, I’ve been hearing more and more about big-name companies, like Netflix and Stitch Fix, offering unlimited vacation benefits. But like any skeptical human, I wondered whether this was too good to be true, and how much importance we should place on these types of progressive benefits when searching for a job.

To find out more, I spoke with management consultant and The Balance’s human resources writer Susan Heathfield to get her take on the whole idea.

Why Companies Offer an Unlimited Vacation Policy

Heathfield told me many employers offer unlimited vacation benefits as a way to attract skilled workers in a competitive job market.

“In the U.S., young people are not learning and studying the subjects that will prepare them for STEM careers (science, technology, engineering and math),” she explained. “Consequently, there is already a serious shortage of people with these skills that will only get worse with time. The talent market has become hypercompetitive so employers must provide benefits that make them stand out from the pack.”

This helps explain why the benefit is more prevalent among tech companies than any other industry, and could be the lure young people need to pursue careers in these subjects.

Another reason companies choose to offer this generous benefit is to make sure they have well-rested, engaged and contributing employees. Heathfield said, “Unlimited vacation is one way to ensure this because people who have control of their work-life balance tend to be strong contributors.”

You Might End Up Taking Less Time

Kennesaw State University in Georgia leads sessions about unlimited vacation.

In these sessions, he reveals that many employees end up taking less time off under an unlimited vacation policy than they would under a limited one.

This could be because, under an unlimited vacation policy, you might be more concerned about taking too much time and abusing your employer’s trust.

If you find yourself in this situation, it’s best to ask if your company has any guidelines on taking vacation, such as how much notice to give and how much you can take off at one time. Even an unlimited policy has its boundaries, and if those aren’t made clear it can actually leave you more confused.

From a company perspective, it’s best to be clear about expectations from the get-go.

“One of the more important factors in implementing such a policy is to be clear to your staff about your expectations regarding use and abuse,” explained Heathfield. “You need to have an excellent tracking tool in place that allows employees to request time and for managers to approve the use.”

Another thing companies should consider is workflow.

“You need the policy dependent on workflow needs,” Heathfield said. “For example, five people from the same department cannot take an extended time off at the same time.”

Use It, Don’t Abuse It

Some companies, such as MammothHR, decide to test out an unlimited vacation policy for a period of time before making it a permanent benefit. If it appears too many employees are abusing the system, the chances of the company keeping the policy narrow.

In other words, if you snag a job at a company offering unlimited vacation time, use it wisely. Make sure you stick within the limitations laid out by management.

Heathfield recommends businesses “make written policies in [their] employee handbook about who is eligible, when they become eligible and the fact that employees cannot expect to be paid for unlimited vacation time when they leave [the] company.”

Even though it can be difficult to implement in the beginning, Heathfield still thinks offering the benefit is a good move for companies.

“I do recommend unlimited vacation as an employee benefit but it must be carefully managed or it could go out of control and become abused by poor employees,” she said.

You Might Take Less Time Than You Think

MammothHR tested their policy for a year and ultimately decided to keep it as a permanent benefit.

Surprisingly, the company found employees took the same number of average days off per year, using the unlimited vacation policy as they did when MammothHR offered a more traditional policy.

But even though many employees didn’t take more time off, they felt like the company appreciated and trusted them more. It also made them feel like MammothHR valued them as individuals who needed varying amounts of time off.

Overall, employees were happier, which is why the company decided to keep the benefit after the test year.

Companies that offer unlimited vacation are still in the minority. But if you’re in the STEM field or happen to come across a job in your industry that offers unlimited vacation benefits, it’s well worth considering.

Just make sure you ask your employer to lay out clear expectations around the benefit before taking any time off.

Catherine Hiles is a writer and editor living in Ohio. When she’s not at work, she can usually be found running, chasing her toddler or eating carbs.