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Lately I am seeing work offers from many companies, and I often found companies based in the US state Unlimited holidays as part of their perks.

During the interviews I asked about this, and they say it is like that. I can take any amount of holidays I want and they are paid.

Then they always make an example: Yea, if you wish you can take a week off and go travelling. Many people in the company are travellers and take one week of for travelling. So cool! Now, coming from an European background and being a hardcore traveller, for me one week off a year for travelling sounds like a walk to the nearby park.

I would like to know if someone, if possible someone who worked previously in European companies in order to be able to compare, can tell me how this in practice works. I do not believe it works as described. Otherwise most of people would be on holidays every day. Wouldn't they? I guess there must be some mechanism to avoid people to take those unlimited holidays. And that's what I am interested in finding out.

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"unlimited holidays" is not a benefit. It's usually a red flag. I know one Senior software developer who had unlimited vacation and they made him feel guilty for just taking three weeks of vacation after one year.

It's also a way for an employer not to pay you for unused portions of your vacation should you get laid off or you quit (should you happen to be in a State that requires employers to pay off unused vacation).

Be careful. The only way to double-check how much vacation you'll be getting is to make sure to interview your future team members. Ask them how long they've been working for the company, how much vacation they've taken in practice, and how much vacation they've actually taken their first year. They'll tell you the truth.

And while you're at it, ask them how many hours they're working on average as well. Or if you can't pin them down, ask them how many hours they've worked last week.

Just be careful who you ask, the amount of vacation you get or the hours you work will heavily depend on your own manager and on the type of work you do. For instance, if you're applying for a software developer position, it would be useless to ask HR, they'll either lie to you or talk about their own vacation/hours which would be useless to you either way.

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    As a counterexample, my job comes with 'unlimited holiday' and in practice this means ~40 days a year. So it isn't necessarily a red flag. But asking a current employee is a certainly a sound idea. – daisy Nov 23 at 12:59
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    In the US? 20 days official PTO is on the generous end. – David Ehrmann Nov 23 at 23:07
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    It's possible I think. A lot of it depends on your seniority, type of work, if your work has peak periods that are seasonal, and/or if you're blood-related to your boss. – Stephan Branczyk Nov 24 at 2:02
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    All non-standard concepts and even some standard concepts can be easily abused. AGILE methodology can translate to "You go to meetings every week and get told to do things faster". Don't fall for buzz words. Figure out exactly what those terms mean for this company. – Nelson Nov 25 at 3:05
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    @smcs the idea is that the employees guilt trip each other into taking the bare minimum of holiday. Like a union in reverse. – pjc50 Nov 25 at 11:51
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I work in a company (~50K Employees) where we have an "unlimited" PTO (paid time off) policy. For us, requests for vacation under 4 weeks a year only have to be approved by our direct supervisor. Then, for every week above that, the request has to be approved by another level of management.

This is my second year at this company, and I've never experienced any pressure to not take the whole 4 weeks (I took 2.5 weeks the first year and 3 so far this year). In fact, my coworkers almost always take at least 4 weeks. I've heard of at least one person taking above 6 weeks, but they had medical issues in their family. Everyone is "encouraged" to take at least 2 weeks per year.

So, implementation definitely varies from company to company in the US, and it's not always a red flag.

However, always check with potential new coworkers to get a good feel for what any particular company's policy really is.

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The main difference between unlimited and regulated European holidays is this:

  • In many parts of Europe you HAVE to take some or all holidays. In some European countries you even have to (by work law) take 10 working days in a row (so that create a 16 days holiday including weekends).
  • In the unlimited case there is no upper cap, but there is usually also not a lower one. So there is no rule "You need to take a week off in a year". So you can be constantly manipulated/bullied into not taking vacations during crunch/hot season/black Fridays/deadlines and so on. (as my friend once said "You like warm beer and sweaty women? No? Then you'll go on vacations in November"). You have much less control over how many days off you have and when.

From a company point of view it's like those open cinema tickets or gym memberships. Of course there will be some people who will get more than they paid for. But most of the people would pay for service that they will never use. And this is the situation where companies profit from.

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    In Europe you HAVE to take the holidays, that's a bit over-generalised. In the UK I certainly had colleagues who didn't take their holidays, and I was unable to take all of mine near the end of my last employment (they were not approved) and got them as extra pay instead. – gerrit Nov 22 at 19:41
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    @gerrit If your employee won't force you to go on holidays (for example last year allocated) THEY could face a fine. In Poland you HAVE to take 10 days in a row. – SZCZERZO KŁY Nov 22 at 22:49
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    @schil227 That his vacations were never approved for his chosen summer time but he was told he can go in November. Presented by an upper management as a form of "caring" for him. For example they told him once that he will save money if he go off-season. – SZCZERZO KŁY Nov 22 at 22:51
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    @SZCZERZOKŁY gerrits point is that people far too often say “in Europe...” when they really mean specific countries within Europe - even the EU doesn’t have rules requiring all employees take X amount of holiday a year, just that a set amount of paid holiday is offered, employees are allowed to take them and in some cases roll them over to the next year or receive payment in lieu. People need to stop saying “in Europe...” because it’s meaningless and almost always a wrong blanket statement. – Moo Nov 23 at 4:00
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    @Moo the directive specifies that EU states will ensure workers are entitled to at least 4 weeks annual leave, which can only be taken as money upon termination of contract. As such, the local law is harmonized with the directive, and I would be very interested to know, which EU state didn't comply with it. – Gnudiff Nov 23 at 23:48
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Unlimited PTO can be great, or it can be terrible - it completely depends on the culture of the company.

The main upside for the employer, however, is that they do not have to pay out vacation when you leave. In California (where this concept originated), the law is very clear that employees accrue vacation with each paycheck, and that it is an asset that they must be compensated for when they leave.

With unlimited PTO, you have not technically accrued any vacation, so there is nothing to pay out upon your departure. That can mean 2-4 weeks of salary that the company saved.

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    Also the personality of the employee. Some people are less likely to take time off when it's always available. I personally fall into this bucket. I've had unlimited time off at a few jobs, and it always turns into extending Christmas and Thanksgiving breaks, family obligations, but no proper vacation. – David Ehrmann Nov 23 at 23:10
  • yeah. And many company cultures are such that people are afraid to be seen to "slack" because it's likely to get them passed over for promotions/raises and put on the shortlist for the next cycle of layoffs. I've worked in more than one company where employees were afraid to use their contractual vacation days, and even were afraid to take time off for serious health problems, as it would get them flagged as "not being good employees", and this was a period where many people were let go every month. – jwenting Nov 25 at 4:40
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I worked for a company with unlimited vacation time a about a decade ago. The policy was similar to NateTheGrate's answer -- depending on the total amount you take each year, it has to be approved by a higher level of management.

The important thing to understand is that you can't really take off an unlimited amount of time -- you still have to do your job. So your manager and the higher-level managers will try to determine whether you'll be able to achieve your goals in the time remaining, when deciding whether to approve the time off.

A better description of it would be flexible time off. It replaces a one-size-fits-all system, where employees all get a specific amount of vacation time each years, usually with a policy that the amount increases as your tenure at the company increases (e.g. 2 weeks the first 5 years, 3 weeks the next 5 years, etc.).

Besides being more convenient for employees, this also makes record-keeping simpler. HR doesn't have to keep track of "banked" vacation time across multiple years, and the company doesn't have to have policies about how much can be banked, how long it persists, etc. Meanwhile, when deciding whether to approve time off, the manager can still take into account that you didn't take off as much time in a previous year.

The flexible systems also tend to conflate different reasons to take time off: vacation time, family leave time, medical leave time. I'm not sure how this works in states that have instituted laws requring employers to provide a minimum amount of medical and family leave time.

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    It's also helpful when you're laying off someone, or when someone gives their notice, because then you don't have to pay him for his unusued vacation days. – Stephan Branczyk Nov 22 at 23:05
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    @dwizum, "(e.g. 2 weeks the first 5 years, 3 weeks the next 5 years, etc.)" You can rationalize it anyway you want it, but if these figures are average in the US, this so-called "unlimited vacation" means that you'll be getting one less week vacation after 10 years than someone in Europe who is starting their first year with a company. – Stephan Branczyk Nov 22 at 23:09
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    @StephanBranczyk The fact that European vacation policies are generally far more generous than US is a whole different issue. – Barmar Nov 22 at 23:11
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    @Barmar, It's not the amount of vacation that I'm objecting to, it's the lack of transparency and the potential for false advertising/bait & switch that I'm objecting to. – Stephan Branczyk Nov 22 at 23:18
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    @StephanBranczyk Those numbers are typical for companies that don't have unlimited vacation -- I was describing the traditional system that it replaces. – Barmar Nov 22 at 23:18
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As others have noted, this is perhaps a more common feature of software engineering jobs. I would say it works because engineers already tend to have a lot of flexibility with scheduling and how their work is evaluated, not to mention variance in the perceived value + volume of work performed by each person.

What prevents someone from taking a 3 month sabbatical every year? Well, reviews. It's pretty hard to do a full-time position's worth of work in 9 months, and your boss will let you know that you have fallen well short of expectations at review time (or just in your regular 1-on-1 meetings). So, in a sense, if you take an excessive amount of vacation, the company will extract the cost from your bonus, your potential raise, and your career advancement. In this way, employees and their managers can make personalized judgments about an appropriate amount of leave and how that should reflect on the total value delivered in a year.

In many companies, this policy is just a formalization of a practice which happens anyway: engineers can often take time off when they need to, modulo getting stuff done. Accounting wants to know how much time everyone takes off, because when you explicitly allocate a certain portion of compensation as vacation time, accrued vacation becomes a legal liability which must be paid upon termination. But if most folks take most of their vacation every year, and both managers and employees have no disputes about the amount of vacation, then this is just unnecessary overhead.

I've known employees that only take 1-2 weeks off, and others that take 5-6 weeks, with no negative impact on their careers. The important point is that strong contributors are often given more leeway than weak performers, for obvious reasons. Nobody will get fired for taking too much vacation, but if a manager perceives someone to not be pulling their weight and taking too much time off, they will try to manage that person onto a less desirable team, with an attendant loss of career promotion value (and often other compensation).

Despite claims of the existence of "10x programmers", I've never seen anyone take 45 weeks of vacation because they were that much better than everyone else. I would say 6-8 weeks would be pushing the boundaries of what most engineers could get away with, possibly at some risk to their career/compensation.

  • "Despite claims of the existence of "10x programmers", I've never seen anyone take 45 weeks of vacation because they were that much better than everyone else." I'm imagining someone who comes in for one day each two-week sprint cycle and then takes the rest of the sprint off as paid vacation days... – nick012000 Nov 23 at 8:37
  • @nick012000 the 10X dream is software engineers who are simultaneously (1) so smart they program 10X their peers but (2) so dumb they take home 0.10X their peers. – emory Nov 23 at 15:15
  • I like this answer because it hints at the idea that "unlimited vacation" policies often lead to more productive members being able to take more vacation days than less productive members. – Jacob Horbulyk Nov 25 at 15:11
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Like so many other things in a workplace, the answer is "it depends". Netflix was one of the early pioneers in the practice of unlimited PTO. An interesting listen is an episode of NPR's Planet Money podcast from a few years ago: Hard Work is Irrelevant

Basically, Netflix offered unlimited time off... but no guarantee that your job will wait for you if you take it; because we're a business and we've got things to do while you're off traveling the world or getting surgery.

  • Only in the US: getting fired for getting surgery that's arguably a sensationalist misrepresentation of the state of US employment law with respect to medical leave. There are plenty of regulations that provide protection for your job while you are receiving medical care or caring for others in your family who have medical issues. A podcast about one employer who tried to find a way around those protections doesn't condemn the entire system. – dwizum Nov 22 at 21:00
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    I did not mean to imply that Netflix was firing people who took time off for surgery; I apologize for the inference. The reason I included a "medical" leave in my answer is that usually a company who offers "Paid Time Off" or "Personal Time Off" does so as one pool of leave; there is no distinction between vacation time and sick leave. – spuck Nov 22 at 21:16
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    @dwizum Thank you for the correction. – gerrit Nov 22 at 21:22
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    @Bloodgain Ok then, I must have misunderstood at-will employment, if there are still some legal protections. Good to know (although going unpaid during this entire time is not great, to say the least). – gerrit Nov 22 at 21:24
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    "at will" employment is often understood to mean that you can be fired for anything. What it really means is you can be fired for anything that's not illegal - and people often forget the pile of illegal things! Essentially what it boils down to is closer to without cause in the sense that the employer is not strictly required to make a case that they have specific cause to fire you. – dwizum Nov 22 at 21:33
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It varies company-to-company. Check the "fine print" so to speak; find out the process for requesting and approving vacation time, talk to employees about how they feel like vacation time affects their status and pay, that kind of thing.

It's instructive to note that the place where I work toyed with the idea of unlimited vacation some years ago when it was all the rage at tech companies, but say they rejected it because (according to the HR VP) studies led them to expect that failing to track vacation days overall decreases the amount of vacation time actually taken, leading to a more-stressed, less-productive workforce. Instead, the company went with a policy of X vacation days per year which require no approval to use, along with explicit encouragement to use it all rather than accruing too large a surplus. Plus you can drive your vacation balance slightly negative with no approval required, and severely negative with approval from your immediate management chain. For the most part people seem to be happy with that.

On a related note, this company does offer unlimited sick time, which I've found to be a really positive signal. The idea is that sick time serves a very different purpose. If an employee is sick, then they should stay home; no calculations or accounting should be part of that decision.

  • When you say unlimited sick time, is that paid? – kvsm Nov 25 at 16:57
  • @kvsm Yes. It's "normal" PTO up until you reach the threshold for short term disability coverage, after which that's the policy that kicks in. Again, the objective is to encourage a healthy work-life balance. It's relevant to the "unlimited vacation" discussion in the sense that direct wellbeing maintenance is an appropriate place to deploy "unlimited" policies, such that they have the desired effect, while unlimited vacation time tends to be counterproductive. – tylerl Nov 26 at 6:39
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In one sentence, "unlimited vacation" means: vacation at the discretion of the company.

  • Every single unlimited vacation policy comes with some sort of approval scheme over which you will have no control.

  • All the "benefits" of it like flexibility and simplified timekeeping actually benefit the company, not you. Don't expect your manager to remember that you didn't take any PTOs two years ago when you come to his desk today asking for 5 weeks. And if you get a new manager, don't expect him to know how many days you took this year.

  • If your company is going through a rough patch, expect to get little vacation and feel guilty about taking it.

  • In case of layoffs, you can be sure to get fired just before that big vacation you have planned.

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