Is Unlimited PTO a Scam? The Policy Everyone Loves to Hate
Unlimited PTO sounds like a dream. Take all the time off you need, whenever you want. No accruals. No “use it or lose it.” Just freedom. True? Yes.
Also true: unlimited PTO is also a perk for the company. In practice, it can lead to fewer days off, blurred boundaries, and no payout of accrued time when you move on.
The hidden Red Flags
1. Nobody’s Really Tracking It and That’s the Problem
Without accruals or caps, there’s often no baseline for how much time employees should take. That ambiguity can lead to guilt, peer pressure, overusage by some and under-usage by others. Ironically, companies with unlimited PTO often see employees taking less time off than those with fixed policies.
2. No Payout at Termination
With traditional PTO, if you leave your company with unused days, you get paid out. With unlimited PTO, there’s nothing to cash out, saving companies potentially thousands per person. It’s a quiet financial win that’s rarely mentioned in job offers.
3. It Relies on Culture, Not Policy
Unlimited PTO only works when leadership models and actively encourages time off. If your manager never takes vacation, do you really feel empowered to unplug for a week?
4. Performance-Based Time Off Is a Slippery Slope
Some leaders say, “Take as much time as you want as long as your work gets done.” That sounds fair… until it becomes a tool of favoritism or quiet punishment. Who defines “getting your work done” in a high-demand, always-on environment?
When Unlimited PTO Does Work
It can be great - I’ve seen it work very well if your company backs it with structure:
Set a minimum number of days employees must take (e.g., 15/year)
Encourage managers to track and approve time off the same way they would with traditional PTO
HR owns the tracking system and reminds managers to enter PTO
Leadership celebrates real vacations (not just long weekends)
Leaders model by example and takes time off
HR trains leaders to spot burnout — and not reward presenteeism
So… Is It a Scam?
No. It’s a well-intentioned idea that can easily go wrong if not paired with clear expectations, cultural modeling, and leadership accountability. Do it right and everybody wins!
