I’ll add that my law firm also provides unlimited PTO to attorneys. It’s unrealistic for most folks, since they’re all required to bill something in the neighborhood of 1900-2400 hours per billable year (which doesn’t include the time spent working on projects that don’t count toward your billable hours).
On the other hand, if an attorney has had a really busy year and meets his or her requirements well ahead of time, it’s not unheard of for that person to disappear for three weeks. Definitely a career where you need to enjoy it when and where you can.
Yeah. When I worked for AT&T we got all our vacation Jan 1. When I took my package during the trivestiture, we had to leave by Jan 15 - so I got paid for 5 weeks of vacation along with my leaving bonus. Great for me, not so smart for them.
You may not track it, but do you have a vacation time policy? Two different things.
I’ve never worked for a place which had a fixed number of sick days policy - in fact where I work now, which is pretty anal about tracking stuff, doesn’t track. Thus no one where I work ever took a day off when healthy to use up their sick days, and I suspect sick day usage is below places which do have a cap. We have a cap on vacation accrual, so we tend to take time off to avoid running into it. That probably doesn’t happen when you have unlimited time off.
I suspect any place which is clever enough to have an unlimited PTO policy can hire people driven enough to not use it.
I had always thought vacation time was technically considered part of your compensation. My job lets you ‘cash out’ your vacation time; if you do not use it by Dec. 31 the remaining amount is cashed out automatically.
So having ‘unlimited PTO’ seems like a deceptive rip-off because I bet none of it is gonna count toward your retirement/severance/etc. For example, I’ve heard of state union employees hoarding sick leave (which doesn’t cap, you can keep accruing it the entire career) then using a % or all of it toward their pension. They call it ‘spiking’ and recently they’ve been trying to do away with it.
I feel like the advantage of having a fixed, banked amount of paid time off, be it vacation or sick leave is that you are guaranteed to get compensated whether you use it or not. By keeping the whole thing kind of up in the air it means if you had worked 12 hours a day, 5 days a week, 52 weeks a year without missing any days you don’t get anything else. Which is kind of unfair to the hard workers/single people/committed folks.
PTO is a part of your compensation, but most companies do not see it as “additional salary”. Companies give PTO because it is in their best interest. The fact is that employees who take vacation/sick time during the year tend to be more efficientand stay with the company longer. In addition, the employee is not as tempted to come into the ofice sick (to boost their sick time payout) and infect their cow-orkers.
Personally, I think the sate of California screwed up royally when they mandated that unused vacation time be paid at the end of the year. It’s too early for any serious studies to have been completed, but I believe that it will ultimately lead to more employee burn out and lower productivity as people strive to take no time off and opt for the “bonus” check instead. Time will tell.
I work for an unlimited PTO company. People have already mentioned the pros and cons and I have nothing to add except that it seems to work well for us. I usually take more than 3 weeks but then I also work (occasionally) on weekends or after hours.
It’s also easier on the company’s credit rating. A large pool of accrued but unused vacation time is a financial liability and will affect how much money the company can borrow and at what interest rate.
Not necessarily true. Lots of companies have a “use it or lose it” vacation/PTO policy - or more accurately described as a cap. You can earn up to say 400 hours and can’t earn any more. This is of course to limit the company’s liability, especially for those rare employees who bank it all and expect to cash out the equivalent of three year’s pay when they retire. The worst implementation of this that I’ve seen was when I worked for a defense contractor. We used to be able to accumulate unlimited PTO, then they notified us in September that starting December 1st we were capped. The HR memo advised us to take as much vacation time off as we needed to NOW before we lost it in a few months. Unfortunately that ridiculously short notice didn’t bother to consider that we were all involved in the middle of projects and couldn’t disappear for weeks at a time. Lots of my coworkers lost a few month’s worth of vacation time that year. (I was always a vacation-taker rather than a hoarder, so it didn’t impact me too much. I only lost a few hours when the cap hit.)
I’ve seen it offered mostly with start-ups recently. But I have to tell you, having worked for a tiny company before you are usually so busy no one takes vacation because there is always a huge very important deadline to meet. So important that if you miss it, the company would be gone fairly soon. It isn’t even a matter of going to talk to your boss or CEO and ask for approval of the PTO, you just know it isn’t possible to take it and meet the deadlines. But the carrot at the end of this stick is, once they get over the hump, you’re going to be able to take all this time off. But that isn’t always the case, start-ups can be very draining situations because every action is treated as mission critical. Unlimited PTO is being labeled as a perk, but it appears to be in the best interests of the company. Because if you otherwise banked 3-4 weeks of vacation and then quit the company they would have to pay you that vacation time. Where with unlimited PTO, they don’t owe you a thing with vacation if you leave.
Start-ups are a very risky business to begin with. They offer to pay low salaries sometimes in exchange for equity in the company which could easily become worthless. I knew a fellow who was given equity in a company that he told me was worth several million dollars at the time, but he wasn’t allowed to sell any of it for a few years. By the time it came to exercise the stock he was given, it was worthless.
I have a friend who works for a company that has this policy, and it’s caused some friction after he changed managers. He was even explicit when hired that he expected to take x weeks per year of vacation, and felt that he could be a valuable employee and still meet his goals, and his manager was on-board.
New manager, when he requests vacation, doesn’t necessarily deny it, but makes noise about how he’s taking more than other people, or more than his new manager expects, or something. It’s a friction point, and it really didn’t have to be one, especially since he was up-front about it when being hired.
The problem with this sort of policy is that there’s still a policy, it’s just that no one agrees what the policy is. Both the company and my friend would probably have been better off if he had just had the discussion at the time he was hired and come to an agreement on the x weeks and had it written into his contract. No friction, clear expectations.
My company does have the “don’t come to work if you’re sick” policy, and I think it’s fantastic. People actually don’t, and as a result I get sick far less often than many other people. I don’t feel guilty about staying home when I am sick, and I don’t keep track of it (although since I get sick relatively rarely, I expect I take fewer days off due to illness than the average person who has a set number of days). I don’t take days to “use up” my sick days because I feel like the policy is fair and there’s a level of trust between me and my employer. It’s win-win as far as I can tell.
Talking about not having access to be able to sell it until he was allowed. It wasn’t a give them employee the stock and tell them to hold on to it. The way he described it, it was like stock options. On paper an employee is given, for example, 1000 shares but can’t sell them for 4-5 years.
You ask a good question. Some employers give the employees the stock and tell them to retain 10% of them, and they check to see if the stock is still owned by the employee and if it isn’t, they won’t get anymore stock. But in this fellow’s case, he didn’t have access to them until he was allowed to sell them.
Exactly this. In many places in Silicon Valley there is always a crisis. With unlimited PTO you can take vacation whenever there is a slow week. There is never a slow week. With caps you have incentive to take it, since no one can expect you to give up earned vacation. With unlimited, not so much. And people on vacation check email anyhow. That is why I like cruises where you can’t, practically speaking.
In the good old days I worked for companies officially shut down between Christmas and New Years or else effectively shut down. That was great, since no one was expecting a response. Not so much any more.
I worked for a company where you accrued your time off onthe last day of the month and on the first of the year any time not taken evaporated, so on December 31st you accrued a day of vacation and on Jan 1 you lost it. December 31 was a mandatory work dayas well. Such a rip off, also didn’t have any sick leave.
It’s terrible now, I don’t know of anyone who doesn’t still answer company e-mail while on vacation. Not much of a vacation to me, if you are sitting there with still working and thinking about work off and on during the day.
I work for a public company and heard this from both our payroll department and a CA cow-orker. Damned if I can find a cite to verify it, though. Maybe both parties were talking out of their a$$.
Allocating it per pay period is a better way of doing it than “all in January”, if the company is like mine: use it by December 31 or lose it. The result of THAT policy is that you’ll hoard your time off until the end of the year because what if something comes up and you need time… then it gets to be December and all of a sudden everyone is trying to use up their vacation time (and management is complaining that billings are down).
And if work gets insane in December and you can’t use the time, too bad (in practice, you can get approved to carry over a week).
If we had a rolling balance with a cap (as my prior employer had), you could use your time as you wanted, with the knowledge that in a month you’d have another day accrued to use if you needed / wanted it. I think they took a much smaller hit to their billings in December as a result.
Ah, stock options (not that I’ve ever had any, but…).
On the plus side, your friend didn’t have the tax hit he’d have had if he’d been able to sell the stock when it was still worth something. I know, 1 million minus 400K in taxes still leaves you with 600K, versus the 50K (or whatever) it might be worth today…
I’m in a similar boat with some company stock. It was an outright gift (versus an option, where you’re told you can buy stock for x dollars and if it goes up to y, you can sell and profit on the difference). However, it was held for something like 5 years and only then do I truly own it. I’ll have to see how that’s handled tax-wise, as I think that occurs this year. It has actually appreciated since it was issued - say it was worth 100 dollars then and 125 now, so I don’t know if my income would be 100 dollars (then the 25 dollars as a capital gain when I sell it), or 125 dollars (the value when I truly become the owner of record).