“Unlimited paid time off.”
It sounds like the dream benefit, a sign that a company values flexibility, trust, and employee wellbeing. But is unlimited PTO really as generous as it sounds?
I am hearing from more and more job seekers that they are now choosing offers with unlimited PTO policies, believing the organization is committed to work-life balance and preventing burnout by giving employees flexibility to rest when needed. Yet, research and experience tell a different story. In many organizations, employees actually take less time off, not more.
Why Employees Take Less Time Off Under Unlimited PTO
At first, “take as much time as you need” seems liberating. In practice, it often creates uncertainty, which can work against employees.
Fear of judgment and lack of boundaries
There is so much ambiguity with unlimited PTO that employees are nervous to appear uncommitted by unintentionally taking too much time off. In competitive or high-performance environments, employees may feel pressured to appear dedicated by taking less time off, especially if managers rarely take vacations themselves. Research by WorldatWork found that nearly half of workers say they feel guilty when they take time off.
Shifting responsibility to the employee
In a traditional PTO system, the company tracks and manages time off. With unlimited PTO, that responsibility moves to the individual. The same WorldatWork analysis notes unlimited PTO can “shroud decisions about time off in a cloud of uncertainty.” Employees don’t know what is too much or too little time off to take, so they err on the side of caution and often do not take the time they need to recharge.
Blurred lines between work and rest
When no structure exists, time off becomes a judgment call instead of a right. It also leads to people feeling they need to stay connected even while “off.” According to FastCompany, “Research shows … people often take less time off than those with set vacation days.” These policies can unintentionally lead to overwork and burnout, especially in high-performing or competitive environments.
The Financial Trade-Offs of Unlimited PTO
There is another issue that is easy to overlook: no PTO payout when leaving the company. Exiting employees often rely on this PTO payout to get them through the time period, which can sometimes be up to a month, between paychecks from their old company to their new company.
Harvard Business Review notes, “Many employees who were banking unused vacation time resented the loss of a bundle of cash when they retired.” For people moving between jobs, that can remove a helpful financial buffer.
Bottom Line: Evaluate the Practice, Not the Promise
Unlimited PTO can show that a company trusts its employees, but only when the culture truly supports time off. When managed poorly, it removes structure, increases guilt, and eliminates the possibility of a payout. My advice to job seekers is to carefully consider just how beneficial this benefit is while making the decision on which job offer to accept rather than making a decision on face value.
