It sounds like a dream. Take time to work whenever you need it. But how does the unlimited PTO work?
More and more job descriptions offer unlimited paid free time – unlimited PTO – as an advantage. Sick days, vacation, mourning and other types of vacation are grouped together in one bucket. There is no limit to the number of days you can take. If it sounds good to be true, it is. Remember, your job has yet to be done.
“Unlimited PTO is not unlimited. There are definitely a few different considerations employers need to include in their plan to make sure it works well, ”says Liz Peterson, manager of the Society for human resource management Knowledge Center in Alexandria, Virginia. “There are some limits and some exceptions. Just because the credit is unlimited doesn’t mean that every request will be accepted. Employers need to consider their staffing needs. ”
Unlimited PTO policies as job benefits
Unlimited PTO is a tempting bargaining chip, especially in highly competitive industries looking to attract top talent. Companies say this is a way to show that they care about their employees and trust them to make good decisions about the time it takes to get the job done.
Research in 2018 from the HR platform Namelyshows that people with unlimited free time have an average of fewer days (13) than people with a limited number (15).
“A lot of employers are initially very concerned about unlimited PTO plans because they feel like people are abusing them,” Peterson said. “What we do find out from employers, however, is that this is usually limited to just a few outliers who abuse the system, and the majority are actually using less PTO than they would on a limited PTO plan.”
Unlimited PTO considerations
There are many things to consider when considering an unlimited PTO job or when your company is looking to change its policies. The federal government does not impose any exemption guidelines and because of this, the amount of leave that full-time workers earn varies.
Types of vacation policies
- Traditional: An employee is given a fixed amount of time off, which often depends on the length of time in the company. The accrued hours are often separated by type, e.g. B. Vacation or sick leave. With this system, a company can calculate the cost of free time and set the PTO levels according to seniority. When an employee leaves a company, the employee may be entitled to a payout for unused time. Some companies limit the hours an employee can transfer or transfer from year to year.
- Flexible: Some companies combine all kinds of free time in one pool so that employees are flexible about when they need time, rather than necessarily having to define the type of time they need. Sometimes employees are entitled to payouts when they leave. Some companies limit the number of hours an employee can transfer or transfer from year to year.
- Unlimited: As long as free time doesn’t disrupt business or the ability to complete the job, employees can take the time they need and want. If an employee leaves the company, there is no payout because no time has actually been earned or accumulated.
Unlimited PTO Not the norm
According to MetLife’s U.S. Employee Benefit Trends 2020 study70% of the employees surveyed, who were surveyed in two waves at the end of 2019 and the beginning of 2020, wanted unlimited free time, while only 4% of the companies offered this.
“I worked under the unlimited PTO philosophy for a while. I’ve been a manager for probably more than a decade and I always feel like we are all individuals. We all have different charging needs and it’s important to be able to charge, ”said Isaac Josephson, senior vice president of product management at fuboTV in New York. “Even if I haven’t worked for companies with an official unlimited PTO policy, my under the table policy was what you need while you do the job. We’ll get there.”
Advantages and disadvantages of the unlimited PTO
There seem to be two types of people in a workplace; those who need to take time out to freshen up; and those who take pride in working all the time and don’t seem to need or want time.
Neither type understands the other, and conflicts can arise in a workplace that does not have a hard and fast policy on how many days a person can go off.
“One of the biggest problems is that employees avoid taking PTO because they are afraid and not entirely sure when it is acceptable to take a vacation or how long to vacation,” said Peterson.
Advantages for the boss
The employer or company with unlimited PTO systems:
- Shows trust in employees to make good decisions.
- Often a cost saving is achieved because there is no vacation liability in the books.
- Removed December urgency for anyone trying to take up idle time before it runs out.
- Keeps employees busy knowing they can take time off when needed.
- Trade with flexibility. Employees often work harder and invest in the company mission to make sure the job gets done so they can take time off.
It also spends less administrative time tracking the categories of leisure.
“It’s really up to the employer whether they want to track it or not. You pay your employees their salaries and some employers say the hell we won’t even track it,” said Peterson. “I think most employers are tracking this because they want to know how it’s being used, and may also want to see if there is a pattern or overuse. “
Benefits for the employee
There are also benefits for the employee with unlimited PTO:
- Take time off for whatever reason. No need to claim or streamline a “Mental Health Day”.
- Take time off anytime; You don’t have to wait for the time to run out.
- Stay home when you are sick without feeling guilty or stay home to deal with a sick family member.
- Make time for personal interests or hobbies, even if they occur during traditional work hours.
- Make sure employers trust that they are focusing on posts rather than the clock.
Disadvantages of the unlimited PTO
There are some disadvantages for companies and employees. If you work for a company with such vacation opportunities, it’s good to know that:
- Companies lose the opportunity to receive time off as a reward for loyalty and longevity. When everyone has equal access to free time, there may be no incentive to stick with one company.
- Consumability can be an issue when someone admits their job is done and their schedule stays clear. Are you not busy enough?
- The creation of so-called labor martyrs is one possibility. These are employees who choose not to take time off for various reasons. Does someone look inferior or disengaged when they are on vacation or have random days off?
- There are also no reserves of spare time for something big or a personal severance package.
How much time do I have to take?
So how do you know what unlimited really means? The work still has to be done and in some industries employees have to meet minimum quotas or bill customers for a certain number of hours.
One way to find out what the policy means in your company is to ask others. Find out how much time they are taking and whether managers and supervisors are encouraging employees to take time off.
“Employers need to be very clear and model behavior when traveling on vacation, and executives should talk about it all the time,” suggested Peterson. “When we talk to your employees about their plans and know what they’ve done, everyone realizes that vacation is a good thing, and even my boss does.”
Even if the policy is unlimited PTO, employees should have a written policy.
Gail Farb, an employment lawyer Williams Parker attorneys in Sarasota, Florida recommends the following guidelines:
- How and when to request the PTO.
- Circumstances under which a request could be denied.
- When the expectation is to take a vacation every year.
- If a maximum of one time is required at a time.
- If there is a minimum time, employees should take their time.
- How PTO works with absence, including FMLA, military leave, etc.
- How superiors keep track of their free time.
- The consequences of having a pattern of overuse.
- A clear statement about the PTO payout when an employee leaves the company.
In order for unlimited PTO policies to work, communication is key, especially from management.
“We have to go from authorizing vacations in a way that makes people feel like it’s a fight for the team.” It can make people feel like they can’t ask anymore, “said Peterson. “But if we zealously approve your vacation request and look forward to it, it will relieve that pressure and let staff know,” I did well. That’s fine. I can go on vacation. “
Tiffani Sherman is a Florida-based freelance reporter with more than 25 years of experience writing on finance, health, travel, and other topics.
This article originally appeared on www.thepennyhoarder.com