Whenever I find out a company and job I’m interested in has unlimited PTO (Paid Time Off) I’m no longer interested.
As a software engineer I find there is always work that can be done. This makes me afraid of “You can take time off as long as the work is done.”
Am I wrong? Is unlimited PTO generally beneficial to employees?
Having worked for a company with "unlimited" PTO I can tell you that my experience was almost universally bad. People were always worried that if they took too much, that is more than other people, it would reflect badly on them. So I found, and most people I talked with agreed, that we took LESS PTO under the "unlimited" program than with a more traditional approach. I rarely took more than 2-3 weeks per year even though I had been eligible for more before they went to that plan.
The only time it worked in my favor was after I had decided to move on but had yet to put in my resignation. I took 3 weeks off, then came back and gave my 2 weeks notice. Note that you never have "unused" PTO so in those places where unused PTO must be paid out at termination, you will not get anything. My manager, however, was a great guy and got me into a "lay off" program and I received 6 weeks of severance pay.
I'm sure that there are other companies that are less toxic where it works out better. A lot depends on the company's attitude toward their employees.
This makes me afraid of “You can take time off as long as the work is done.” Am I wrong…is unlimited PTO generally beneficial to employees?
You're not entirely wrong.
In states like California, companies do select such a policy because they don't want employees to accumulate PTO, nor do they want to pay out vacation time whenever an employee quits, or gets fired, or gets laid off. And yes, having such a policy does have a chilling effect on employees taking the PTO they're entitled to.
But at the same time, if you're applying to tech companies in California, it would really be foolish to avoid all companies that have such a policy because it's very common, plus for some companies, it's not always a negative for the employee.
If you want to see how the policy works in practice, ask your future colleagues (at your level) during the interview.
"How does this "unlimited PTO" policy translate in practice? During your first year, how many vacation days did you actually take?"
With that said, I understand if you don't want to ask too many questions related to PTO during the interview itself.
So definitely, talk to your friends/acquaintances, have informal coffee chats with current/former employees, use sites like Glassdoor, Blind, LinkedIn, and use Google (if the company is large enough). There is a lot of bad information you can uncover that way.
But definitely do not blacklist all employers that have such a policy. If you're applying to jobs in California, doing so would be sabotaging your own job search before it even gets started.
TL;DR: It might be a "red flag" sometimes (maybe even often) but not always. Some companies have good intentions with such a policy but their employees might not feel comfortable taking enough time off.
I am a manager, and was also an engineer, at a company with an unlimited PTO policy. I can't speak for all companies, but I can say that in my experience, "Unlimited PTO" at the company I work for is as good or better than PTO policies I have seen elsewhere in my career.
When my team requests PTO, my criteria for accepting or requesting changes is as follows:
If there's concerns based on those criteria, then I would ask my employee to reschedule, not outright reject the PTO. And it's a conversation, not an outright denial.
For what it's worth: in over a year in my management role I have never needed to ask for anyone to adjust their PTO requests, and I have never been denied or asked to change my own PTO requests.
Note that none of my criteria includes "how much time has this individual taken so far?" -- This is not even a metric I track, because it's not data I need. Instead, at performance review time, I sit down with each of my team members one-on-one, and look at how they are performing against the goals we set for them. If people aren't meeting their goals, we can look at reasons. (And "too much PTO" has never been one of those reasons)
This is just one datapoint to answer your question "Is avoiding companies with Unlimited PTO a bad idea?". I would be disappointed if you did not consider one of the positions I am hiring for simply because we have an unlimited PTO policy.
The other answers make some very good points, specifically with regard to accrued PTO that, at other companies, must be "paid out" when leaving. In this regard, Unlimited PTO does benefit the company more than the employee.
After reading other answers on this question, and discussing internally, I'm going to start tracking last time PTO was taken by my team, and reminding/encouraging people on my team to take PTO if they haven't done so recently, to ensure that people don't feel like they shouldn't be taking PTO.
For companies that have unlimited PTO policies, ask what the average number of PTO days taken are for the company. It’s a red flag if they don’t have that information.
My company averages 26 days a year and our recruiters will gladly say that. Additionally, my department leads insist on “at least” 20 and forecast December as a “slow” period.
There's no way that unlimited PTO can be honest. It's as simple as that.
If it was honestly unlimited, individuals could get hired and take 100% of their time off. Clearly the company cannot allow it.
From there, it logically follows that there exists some mechanism to limit PTO, which they are not telling you until you get hired. This can be pressure from fellow employees, the threat of getting laid-off, psychological manipulation. But there is something. So, beware. Unlimited PTO means: We're not fully honest with you during hiring.
Contrast that with a clear contract: 3 weeks PTO, manager can override it if project is late. Well, doesn't look as great, but clearly more to the point and honest.
Anecdote: I've worked at an unlimited PTO place to try it out. I was willing to work 11 days out of 14 and needed 3 days to fly back to hometown, during initial trial period. Told them during hiring. They say yes, sure. Guess what? They clearly expected 14 working days per two-week period. Lesson learned for me.
Also, one of the top answers, which is pretty good, lists:
>With that said, I understand if you don't want to ask too many questions related to PTO during the interview itself.
Just imagine how much of a crazy-house type of place you are are talking about when the discussion about hiring you is not appropriate to discuss terms of you working there. Mind-boggling red flags.
I don’t think that should be a single deciding issue, if only because so many good software engineering jobs will be in companies with such policies.
The important thing is to learn as much about PTO expectations as you can before you take the job. I recommend asking HR if they compile stats about PTO usage. That should tell you a lot, and a lack of data or an unwillingness to share can also be telling. You should try to learn about the approval process. If you find out who would be approving your PTO (for instance, your future manager) try to talk to them about how they personally manage the unlimited policy.
I was concerned about unlimited PTO at my current company when I interviewed. My concerns were put to rest when HR shared (without prompting) the full breakdown of average PTO usage, including holidays and sick days, and when my future manager expressed that he’s more of a “book the time and let me know” kind of person. I doubt most companies are as forthcoming, but you don’t know until you ask, or until they tell you.
I worked for a company that converted from fixed max days off (sick and vacation) to unlimited PTO. The stated reason was that it would eliminate a liability category from the books for the parent company (accumulated days off x prorated salary). That should tell you enough right there.
However, in practice, it depended a lot on the individual manager and what their group did. Some groups were able to make it work well. Those tended to be developer groups where it was relatively easy to shift responsibilities. The ones where it didn't work well were those where the workload was already somewhat high and there tended to be individual experts. Our support organization tended to be in that category.
It's not bad to have "unlimited" PTO. We all know there is a limit to it, but it's just not a static number published by HR.
The easy way to deal with it, and not feel bad or afraid you're abusing it, is to take off the general amount of time you might have had before at an organization with static PTO, given your years of experience in the industry -- not the years at that specific company.
For example, if you'd normally get 4 weeks of PTO, then just plan to take 4 weeks of "unlimited" PTO. You and your management will most likely have a common degree of comfort without ever having to discuss it.
Unlimited PTO can come in handy if something "special" comes up -- ie. the loss of a family member, COVID-like childcare scenarios, extended illness, etc. Companies and employees all know it's not really unlimited, it's just designed to be more flexible and eliminate PTO-payout liability from an accounting perspective.
Don't let the fear of this new trend scare you away. It wasn't that long ago when companies had sick time and vacation time and you couldn't mix them. This is just a further expansion of flexibility around taking time off.
Although this has now been tagged as US, from the UK, I can see another way of looking at this. We generally have two buckets of time off, holiday, which is paid and sick days, which are also paid but possibly at a lower rate. That means we never have the question of burning a day of holiday because of illness. If we are sick it comes out of of sickness allowance, if we are on holiday, it comes out of holiday. We are also entitled to claim back holiday if we are sick. Sick days are, broadly speaking, unlimited but holiday usually is. This is all irrespective of emergency leave and compassionate leave etc.
The point I am making is this: from my perspective, unlimited PTO is not a red-flag but in some respects, the norm. If you consider that you no longer have to sacrifice a valuable day of holiday because you have a migraine or a child\dependent needs you then it is a very useful thing to have. Yes, it can be abused but so can any system.
