What are the best practices when offering unlimited paid time off (PTO)?

To help you with unlimited PTO best practices, we asked people managers and business owners this question for their best insights. From writing policies carefully to using automated systems, there are several tips that may help you best manage an unlimited PTO policy at your company.

Here are eight best practices when offering unlimited PTO:

  • Write Policy Carefully
  • Require a Minimum Number of Days Off
  • Distinguish Between Types of Leave
  • Create a Goal-oriented Company Culture
  • Reward Based On Results, Not Appearances
  • Have a Task-based Structure
  • Practice Clear Communication
  • Automate PTO for Fairness and Accuracy


8 Best Practices When Offering Unlimited PTO


Write Policy Carefully

Although an unlimited PTO policy sounds great, you have to acknowledge the fact that the move can also expose your organization to possible legal repercussions. In California, for example, an employee sued for compensation over accrued vacation days, noting how they were entitled to receive wages for unused leave. 

Considering this case and taking into account other possible claims, it is crucial for an employer to pay due attention to these possible complications, and outline a PTO policy that does not put the organization at risk of a lawsuit. By constructing a clear-written policy that addresses the interests of the employee as well as the organization, you can implement a policy that is fair to all parties involved.

Riley Beam, Douglas R. Beam, P.A.


Require a Minimum Number of Days Off

One best practice when offering unlimited PTO is to require employees to take a minimum number of days off per year. This helps to ensure that employees are actually taking time off and not just abusing the system.

Another best practice is to require managers to approve all time off requests. This helps to ensure that employees aren’t taking advantage of the policy and disappearing for weeks at a time.

Finally, it’s important to have a clear policy in place regarding how much notice employees need to give before taking vacation days. This helps avoid any conflicts or confusion over who is allowed to take a vacation and when.

Ilija Sekulov, Mailbutler


Distinguish Between Types of Leave

Volunteer time off is different from vacation time, which is itself different from sick leave. You may think unlimited PTO puts all of these under the same umbrella, but expectations and outcomes can differ depending on the type of leave. If your company doesn’t set a policy on this, employees will make assumptions, essentially setting the policy on their own. Work with them to create an array of standards and protocols that can make specific types of PTO more successful for both parties.

Shawn Plummer, The Annuity Expert


Create a Goal-oriented Company Culture

When you have a goal-oriented culture, it means employees are invested and dedicated to achieving different benchmarks and goals, because they are committed to the company. Empowering and supporting your employees will give them a vested interest and commitment to the company, which will inspire them to see a job through to the end. The best practice when offering unlimited PTO is to cultivate a goal-oriented company culture so your employees will respect and appreciate their earned PTO.

Tony Staehelin, Benable


Reward Based on Results, Not Appearances

Companies that allow unlimited PTO should not penalize employees who choose to spend their time. Thus, employees should be judged by the results they produce, not by how frequently they’re at the office. This will promote efficiency, productivity, determination and inspiration to complete tasks better and faster. The better the results they deliver, the greater chance they’ll be rewarded, recognized for their efforts or even promoted.

Dan Gray, Kotn Supply


Have a Task-based Structure

Offering unlimited PTO and flexibility is a huge advantage for employees and an excellent benefit that will attract talent. However, it can heavily impact the company if not done correctly. 

To make it work without putting the company, the team or the workflow at risk, it is important to have a task-based system that allows employees to get the time off they need after finishing their tasks, while making sure that the work is accounted for. This will help motivate employees to be more productive, work more efficiently and take full responsibility for their work. They will be able to enjoy PTO without causing any bottlenecks or issues at work.

Nicole Thelin, Low Income Relief


Practice Clear Communication

One best practice when offering unlimited PTO is to make sure that all employees have a clear understanding of the company policy and how it works. This can help avoid any confusion or misunderstanding about the policy. Additionally, it is important to communicate with employees regularly about their PTO usage and make sure that they are taking advantage of the policy in a way that is beneficial for them and the company.

Linda Shaffer, Checkr


Automate PTO for Fairness and Accuracy

One best practice is using a PTO automation platform to easily handle requests and approvals, and it also allows managers to easily see when employees aren’t taking enough time for themselves—or less often, are abusing the policy. If a manager sees in the reports that employees aren’t taking enough time, they can remind and encourage them to take more. A platform also ensures a company is applying its PTO policy fairly and evenly for all employees.

Nir Leibovich, GoCo


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