Microsoft will stop tracking vacation time for US salaried employees, internal memo shows

• Microsoft will no longer track vacation time for US salaried employees, an internal memo shows.
• Employees with unused vacation time prior to Jan. 15 will receive a payout in April.

Microsoft is no longer tracking vacation time for US salaried employees starting Jan. 16, according to an internal announcement viewed by Insider.

"You will no longer formally record your vacation time," the announcement states. "How, when, and where we do our jobs has dramatically changed. And as we've transformed, modernizing our vacation policy to a more flexible model was a natural next step."

Time-off will still require manager approval, as is standard for companies with "unlimited' vacation time. Employees with unused vacation time prior to Jan. 15 will receive a payout in April.

In addition to the unlimited time off policy, salaried US employees will get 10 corporate holidays off, can take leaves of absence, and have other days off for illness and mental health, jury duty, and bereavement.

"Beginning January 16, 2023, Microsoft is modernizing our vacation policy to a more flexible model and transitioning to Discretionary Time Off (DTO)," a Microsoft spokesperson said in a statement to Insider. "How, when, and where employees do their jobs has dramatically changed and DTO aligns with more flexible ways of working."

The Verge earlier reported on the policy change.

Hourly employees and those working outside the US are not eligible for the unlimited time off policy due to different laws and regulations, the memo said. Microsoft employees outside the US will keep existing vacation benefits.

Microsoft has experimented with other employee benefits in the past, like trying a four-day workweek at its Japanese subsidiary in August 2019. The experiment found that productivity in the office increased by 39.9% compared to the previous August.

It's also among other tech titans that have allowed most employees to work from home part time. Last year, the company tried to get employees back in the office for at least half of the week, but by June admitted that "a back-to-office 'normal' may not happen this year."

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