Unlimited Vacation Time (opens in new tab)

"Unlimited vacation" translates to "no vacation".

What does "as long as you're getting your work done" mean? There's no point in the year when nobody would be happier if you got something done sooner. There's never a time when taking vacation doesn't mean that some work you might have done doesn't get pushed to somebody else, or never done. The point of vacation is that you should be able to relax, but if you're worrying that you're screwing the company by not getting your work done, how can you relax?

Unlimited vacation sounds nice, but in practice it doesn't work.

Another less likely employer benefit to be considered is that in roughly half of that U.S. states, employers must pay out accrued vacation time if there is a policy in place.

An example from California's vacation faq (http://www.dir.ca.gov/dlse/faq_vacation.htm):

"For example, an employee who is entitled to three weeks of annual vacation (15 work days entitlement per year x 8 hours/day = 120 hours vacation entitlement per year) who quits on August 7, 2002 (the 219th day of the year) without having taken any vacation in 2002, who has no vacation carry-over from prior years, and whose final rate of pay is $13.00 per hour, would be entitled to $936.00 vacation pay upon separation"

What I think is a more interesting ideas is this: minimum vacation time. You must take at least X vacation days / weeks per year. I think that would be the best of both worlds and avoids the psychology wherein no vacation is had, which is toxic

I switched from a job with 3 weeks of vacation (that would be 4 by now if I had stayed) to one with no policy. My take on it is I can take 3-4 weeks a year without feeling guilty.

I honestly think every responsible and competent adult (and I purposefully leave those terms imprecise) should have no vacation policy. Vacation should be a fact of life: take it when you need it, don't take it when you can't, and work as much as you need to to do a good job (again, imprecise).

I've been the beneficiary of vacation payouts somewhat regularly, which were in addition to bonuses paid based on overtime hours. I was also able to take advantage of a significant chunk of vacation I had built up when I left my previous company to help fund starting a new company.

In my case, I would probably not benefit dollar for dollar from an unlimited vacation policy. I would either take less vacation or not benefit from the payouts. That's not to say that unlimited vacation is a bad policy. It might be a great policy, and I'm sure it depends on the details of how it is implemented and the culture of the company where it is implemented; however, it is certainly possible that the practical outcome is more of a net benefit for the company rather than the employees.

Since many startups these days are advertising unlimited vacation, I'd love to hear from both founders and employees about some of the practical ways in which this policy plays out.

We've talked about this a fair bit at 42Floors. The consensus is that the more senior people need to make an example of themselves by liberally taking vacation. If they set the example, then everyone else will take vacation.

At a previous startup, we had pretty much unlimited vacation time, and the result was that no one took any. So clearly this doesn't work unless you make a point of encouraging people to actually take advantage. We thought about setting a minimum vacation policy where you have to take at least a certain amount, but some people didn't like the idea of being forced to take vacation.

Since I haven't taken any significant vacation since I started (6 months ago), I recently made a deal with Jason (the CEO) that I need to plan a significant vacation by the end of February. Suggestions welcome...

What I think is more important than vacation time is the ability to take time off for a doc appt., dentist appt., go see the kids play at school, take a walk around, because you're sick.

Also, freedom from incompatible work environments would be nice. It is way too noisy where I work. At the very least they should provide nice ($300-400) noise cancellation headphones without me having to beg.

I totally agree with you! It's hard enough to get away with taking vacation when it's quantified. Also, I notice that a lot places offering unlimited vacation tend to be younger companies that are growing which makes it that much harder to "get away" without disruption.

If you feel guilty or pressured when taking vacation then perhaps you need to find a better company. The mind and body need breaks.

I notice when I'm offered a certain amount of vacation but feel pressure not to use it, I'm much more likely to use it. The hypocrisy gets to me, and I think, "If you don't want me to use it, don't offer it!" If a boss can't plan around his employees taking the offered vacation, then he's probably not doing his job very well.

I've been working overseas for over 4 years, and I'm only now getting used to the amount of vacation time we get. We are actually encouraged to use all of our vacation time. --It works out like this:

By law we get 5 weeks of vacation a year. My employer throws in an extra week as a perk, but that week gets used last, and can't roll over - basically use all 6 weeks or lose one. And then you can roll over up to 2 weeks if you don't use it all. So in practice, this means that you'll take at least 3 weeks, and almost everyone takes the full 6 weeks, unless they're planning something for the next year and know that they'll want an extra two weeks.

Like most things in business, the problem isn't with the policy, it's with management. If you create a culture that frowns upon employees taking vacation time, it won't matter if you give them unlimited vacation or only two weeks, nobody will take it. And if you create a culture that values rested, refreshed, happy employees, the total number of days isn't nearly as important.

With that said, when unlimited vacation time is implemented well, it can be amazing for both the company and employees for a number of reasons:

1) You don't worry as much about things like sick days or one-off PTO. Work doesn't always follow a 9-5 schedule, so if you end up working 60 hours in four days, you can just take Friday off - it feels like less of a big deal if you don't have to worry about 'losing a day.'

2) Do you need to leave early to make a flight? Don't worry about entering it into the system, just do it.

3) If people are legitimately sick, they won't come to the office and infect everyone out of fear of 'using a sick day.'

4) Holidays get a lot easier. Do you not mind working between Christmas and New Years, but want to take time off for Eid/Rosh Hashanah/Diwali/Festivus/whatever? All of a sudden it's not a big deal. It's also great for parents, who don't have to worry as much about child care if their kids have random day off of school.

5) You can take a 'big trip' without losing all your days. The consecutive days, rather than the one-off long weekends, are the bigger issue for a company. I've actually found it easier to take a long trip when I didn't have to worry about losing all my days.

Companies are nervous about this arrangement because they worry employees will abuse it, but again, that's a management issue. You have unlimited vacation time as long as you are getting your work done. If you're taking so much time the work isn't getting done, then the issue isn't vacation time, it's a performance problem, the same as if you showed up every day and just played on facebook.

Because the management piece of it is so important, there are also things companies can do to make a system like this work better:

1) Create a mandatory 'real vacation' by requiring employees to take at least a week off, in a row, once a year. If employees feel like they can never take time off, they'll get burnt out and you'll lose great people. If you make a vacation mandatory, people will feel more comfortable taking the time, and the company will reap the rewards of happier, clearer thinking people. Plus, many people, especially in creative or professional jobs, get inspired when they're able to step away from the day to day for a little bit.

2) Make telecommuting easy, so that employees can still check in even if they're not in the office. Sometimes, people only really need a half day, but don't mind sitting on e-mail in the morning. Or they have their kids around all day and would love to get the opportunity to talk to some adults. The important thing here is to be flexible, and make sure that telecommuting doesn't become "we can make you work wherever, whenever, even on vacation."

3) Have real performance management. This isn't about annual reviews, it's about managers that provide ongoing, regular feedback about how employees are doing against the company's goals, help them understand when they're falling short, and work non-performers out of the organization. Top performers will get turned off by anyone abusing the policy, even more than management.

Back when we were doing our startup, we had a month's worth of vacation hard-coded into our employment contracts. Everyone got the same amount. This gave people a good measuring stick of what we expected under normal conditions. We didn't enforce the limit though, so people could take more if they wanted to (which happened very rarely). We also encouraged people to take time off, especially when they seemed burned out.

This worked amazingly well. It was one of the very few things we did right.

My company previously had 12 days of vacation a year, they switched to "unlimited vacation" - most people, myself included, take about a week a year now.

Unlimited Vacation policies borrow from the Unlimited Sick Time. Most companies used to be explicit about sick days. "You get 6 per year." Then a few companies started with a more enlightened policy of, "We don't count, we trust you." Perhaps the early adopters of this policy viewed it as a trust issue. Then the data started coming in... On average people took a lot fewer than 6 when nobody was counting. The policy then turned in to a cost savings plan, and everyone started doing it.

The "You get as much vacation as you want" seems to be going that direction too. The early adopters were enlightened, thinking, "The value of showing trust to an engineer will more than pay for the rare abuse." It does save money, and now the cost cutters are seeing it too.

I've worked in several places where you get a month of vacation, and never get to use it all because you're too busy. Changing that to unlimited does not help much.

Some things that do help: - Mandate everyone takes a 2 week continuous vacation. This is done by banks for compliance reasons. (Harder to hide fraud if you're out 2 weeks in a row.) It is very beneficial, because this forces you to take at least 2 weeks of your allocated 4. - Allow paid sabbaticals. "After X years, you can take 2X weeks off for a continuous sabbatical that we pay for, and we'll pick up half of any coursework or travel costs." - Lead by example. This is VERY tough, because most good leaders like to lead by example showing that they're not above working hard. They can also lead by example taking their vacation.

In the end, none of this is altruistic. It's a way to keep talent motivated and feeling valued when they have lots of options. If you stiff a good engineer 2 weeks of vacation, they can always make it up by taking 2 weeks off before starting another job. :-)

When I had a few employees in Manhattan, my policy was "Sick days, holidays, vacation --just do what makes sense." It all worked out fine.

My office manager, whose main house was a couple hours outside NYC, took 3 and 4 day weekends at the slightest pretext, e.g. some Jewish holidays I've never heard of before or since. Once she even got it up to 5 days. On the other hand, the only time she took a solid week off was when I insisted she fly to her estranged mother's funeral. And she didn't get sick much.

My #2 office guy was Catholic, and didn't need the Jewish holidays. About the only time they overlapped on a day I wanted to be open was for Good Friday (which of course usually falls during Passover).

It all worked out fine.

Similarly, both there and especially in the Boston area where people drove to work, my policy was "Good heavens, don't start at 9:00 am and fight the worst of rush hour unless you really want to!" Some chose 8:00 am, some 10:00 am. I had more coverage, and it was all good.

There's a huge discussion here on how what really matters is company culture, not policies on how much vacation time you're allowed.

My takeaway is to only work for companies where you already know somebody outside of work. The problem is that it's really hard to get a sense of a company's culture during the interview process, so unless you have a friend who's willing to tell the truth you can easily be deceived. I know some companies that claimed to have 40 hour work weeks but people frequently came in on weekends. More surprisingly, I knew some companies where they claimed to be workaholics but generally held 9-5 hours.

So find someone you trust to tell you the raw truth about the company-not the whitewashed sales pitch. "2 weeks of official vacation, but people actually take 5" is a lot better than "unlimited vacation, but no one takes any."

At Levion, we're looking at implementing a stated vacation day policy, but as a matter of policy. So to avoid discouraging people from using say, 10 or 15 days of vacation, you are guaranteed those days. As a matter of policy, we probably won't track vacation days unless it feels excessive (and where you need to "buy" vacation days if you go over excessively). How does this sound?

I've found that it's sometimes the case that you will officially get offered a fixed amount of vacation time, but informally you can take more than it if you want.

The unwritten rule seems to be "you're working really hard to get a featured shipped, if you need extra vacation to decompress after, feel free".

I'd go on vacation for ever and see how long they keep paying me :-)