Microsoft is set to offer unlimited paid time off – is that a bad thing?

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In a memo sent out to Microsoft’s US employees earlier today, the company announced that it’s switching to a new “Discretionary Time Off” policy for salaried US workers. Beginning January 16th, these workers won’t have to wait until they accrue vacation benefits, and they’ll still be offered 10 corporate holidays, leaves of absence, sick days or mental health time off, and jury duty and bereavement leaves.

Instead of accruing vacation days, which in the event an employee were to leave the company could be cashed in, salaried Microsoft employees will now be able to take days off at their own discretion. Workers with vacation days accrued will be awarded a one-time payout this April, according to the memo.

While “all the vacation days you want” seems like something of a dream come true, a number of companies, among them Salesforce, Oracle, Netflix, and the Microsoft-owned LinkedIn all offer “unlimited vacation” plans, and there are valid reasons for doing so. Companies no longer have to account for workers’ vacation days accrued, how many have been used, how many are left, and get into squabbles if an employee needs an extra day here or there. Less bookwork for the company, less micro-management of employee behavior, which has taken a hard turn since the pre-pandemic days of “you must show up in the office,” and evidence to show that employees won’t take significant more time off than they do under current policies. In fact, they may take off less.

Christina Warren, a former Microsoft Corp. employee who now works at GitHub, isn’t a big fan of “unlimited vacation.” She took to Twitter today to explain why:

Her tweet is gaining a lot of attention (with 153K views so far, thanks Elon Musk!), and it’s an interesting and well read thread. Basically, Warren says that Unlimited PTO is a “scam” because “it is designed to benefit the company, not employee. In the US (the only place you can get away with it), the reason companies do this is so they don’t have to pay out PTO when you leave or are laid off.” She goes on to say “I’m terrible at vacation,” but says that companies offer unlimited PTO because “the numbers have shown it will save them money,” and that it eliminates what used to be a “real tangible value” (accrued vacation time).

A number of replies to the thread seem to quite like PTO at their companies, but Warren’s point remains:

For hourly workers at Microsoft, and well, everywhere, the situation is different, and the company won’t be providing unlimited PTO to hourly workers, US based or not. Microsoft says “federal and state wage and hour laws make it difficult to offer unlimited time off to hourly workers,” but of course you can’t have the cooks in the kitchen or the janitorial staff just deciding to take a week off.

Do you have unlimited PTO where you work? Would you want it, or do you too feel like it’s a “scam?” Let us know in the comments below.

(via The Verge)