Unlimited vacation is the ultimate test of judgment.
For employees, it's a high-stakes bet on whether an employer will stay true to their word. It's also a gamble — take too little vacation and risk burnout; take too much vacation and risk being secretly judged.
In 2021, Lucille, who is in her mid-20s, took a chance on a New York-based PR firm offering unlimited vacation. It was her first time working for a company with unlimited PTO.
After using their policy sparingly, she realized she would need to test its boundaries by asking for 17 days off — a request that meant she would likely exceed what she refers to as the "unofficial" company average of taking three to four weeks a year.
She used her colleagues as a sounding board, then anxiously approached her manager about the request and, to her surprise, found them supportive.
"It wasn't like I took a bunch of vacations," said Lucille, who requested the days off to work on assignments for her freelance writing career. "I'm not sure the same thing would have happened if I needed to take weeks and weeks off to go on personal vacation."
Unlike Lucille's company average, four weeks of vacation is far from the norm in the US.
A 2023 survey from Expedia found US workers with unlimited time off take an additional three and a half days off a year compared to the country's national average of 11 days.
Similarly, the HR platform Namely looked into the PTO trends of 1,000 of its company clients in 2022. It found workers at these employers with unlimited plans took an average of 12.09 days a year compared with 11.36 days for those with fixed plans.
Even with unlimited PTO encouraging workers to take more time off, America remains one of the most vacation-deprived countries.
Workers in the US take an average of 11 days off a year — those working in places like France, Germany, Hong Kong, and the United Kingdom average more than 20, according to Expedia's 2024 Annual Vacation Deprivation Report.
Business Insider spoke with employees who have tested their companies' unlimited-vacation policies to mixed results, showing how it can be a high-stakes gamble with either huge rewards or losses.
(People identified only by a first name were given pseudonyms because they were not authorized to speak with the media or feared career-related repercussions. Their identities are known to BI.)
With great rewards come big risks
Daniel, a Microsoft employee in his early 30s based out of Seattle, also far exceeded the US average of 11 vacation days this year by using the company's discretionary vacation program.
From December 2023 through the end of this year, the program manager will have taken 51 days of vacation to visit spots throughout Canada, Europe, Mexico, and the US. The colleagues he's spoken to typically take four to seven weeks, he said.
For him, unlimited vacation is invaluable.
"I have a kid now, and being able to take her around the world to different destinations so she can experience different cultures and things like that are very important to me," he added.
Although Daniel uses discretionary vacation to travel the world, many of his colleagues that he's spoken to use it for flexibility — whether that's a side hustle or giving themselves a four-day workweek.
Christopher, a US-based software developer in his early 30s, has also taken advantage of his company's unlimited vacation policy to travel the world. In 2022, he took 33 days off.
"I didn't take much time off at the beginning," Christopher, who began working at the company in 2020, said. "But when the pandemic happened, and there was an abundance of tech jobs, I started taking more."
He said his company's unlimited vacation policy allowed him to become a digital nomad. Many tech companies were hiring when Christopher started the job in 2020, but the landscape started to change rapidly two years later as inflation and interest rates started to soar and companies looked for ways to cut costs.
By November 2022, amid a management change, Christopher said he was flagged as having the highest vacation usage in the company and told not to take any more unless there was an emergency.
He said he was also told to work during the week of Christmas even though the rest of his team and the direct employees of the client they were working for were on vacation.
After that, he said, the company implemented a "flexible PTO policy" with a three-week minimum. A few months later, in March 2023, he was let go as part of company layoffs, which he believes was linked to his vacation usage.
Although Business Insider could not verify why Christopher was laid off, taking employers up on unlimited vacation might be a risky move in the current job market, where hiring is slow and low, especially for high-paying roles.
The boundaries may be especially dangerous in tech, which had some of the worst layoffs in 2023 and has yet to recover.
It was a marked change from the near decade of overhiring by technology companies, which engaged in talent wars, launched coding camps to find new recruits, and spoiled workers with six-figure salaries and an abundance of perks.
Tech still hasn't recovered from the bloodbath — layoffs have continued throughout 2024, though the cuts have tended to be smaller and more concentrated.
Even before the industry shifted, Christopher said many colleagues were scared to take PTO. He added that several coworkers had commented on his vacation usage, saying they wished they could take the same amount.
They technically could, he told BI, but most of them "probably maxed out at around 15 days."
It's not uncommon that unlimited vacation policies, which are ill-defined by definition, lead to periods where no one takes days off because of uncertainty and fear of standing out negatively, wrote Bruno Luco, head of people at online walking-tour platform GuruWalk, in a message to BI.
In some cases, he added, team leaders or influential people within the organization must use vacation to set an example for a company.
"Once a group of people within the company start taking vacation, a collective group conscience develops that encourages more people to take their vacation, creating the virtuous circle," he wrote.
Finding the breaking point
Less than 10% of US employers offer unlimited PTO as of 2023. Although it sounds like a perk for employees, it's not without benefits to employers who give it.
It's a well-known financial accounting hack. Under a traditional paid time-off policy, when an employee has earned their vacation time, a company must set aside funds to pay an employee for any owed PTO if they depart.
With an unlimited vacation policy, no such line item is needed.
In the absence of a policy, employees often use their managers, colleagues and an understanding of their own work capacity to gauge how much time to take, weighing up the career risks and life benefits of such a request.
Carlos Arbona, a midlevel account executive in his late 20s at digital platform CoachHub, said he intends to take around 30 days off this year using his company's unlimited vacation policy.
He's already taken 14 days off to travel to Turkey and Greece and plans to visit Spain later this year.
Although Arbona could push the limits beyond two months, he said it wouldn't be in his best interest as it would mean a full quarter off from his sales role, which is his priority.
Similarly, Daniel believes six to seven weeks is his limit.
"That's the sweet spot where the team doesn't miss me too much, and my presence is still felt," he said, adding that anything more would mean his coworkers would have to carry the burden of his "excessive time off."
The breaking point often comes when there is a noticeable decline in an employee's performance or availability, which can manifest in missed deadlines, unresponsiveness, or lack of participation, wrote Paul Lee, cofounder and CEO of AI platform Patlytics, in a statement to BI.
Lucille said she's found that planning for how the vacation will impact the rest of the team is also a big factor in how receptive management will be to repeated PTO requests.
On a similar note, Arbona and Daniel said they can only take this much vacation because they never fully switch off.
Arbona checks his laptop and takes calls on holiday to keep things at work ticking along. Daniel keeps his phone on him and brings his laptop on vacation.
Employees can plan ahead and not fully take off yet still be directly or indirectly penalized for taking PTO — but that doesn't mean they shouldn't request time off.
Lucille describes herself as getting lucky with her company's unlimited vacation policy — but she'd steer clear of places with it in the future because of how dependent it can be on the whims of management and how easily its often poorly defined boundaries can be used against employees.
She said if you have unlimited PTO you can take, you should.
"Everyone should be afforded the dignity of saying, 'I am an adult, I'm going on vacation' without having it framed as taking advantage," she added.