Will Unlimited Vaction Be the Death of PTO and Vacation?

As many of you have probably heard now, Richard Branson has created a “non-policy” vacation policy. He said he modeled it after the Netflix policy. According to writer and entrepreneur Daniel GreenBranson described the ‘non-policy’ as giving employees the flexibility to take as much vacation time as needed when they feel ‘100% comfortable that they are up to date on every project and that their absence will not in any way damage the business or indeed their own career.’” Green raised the question is this a good or bad thing. I raise the question of whether this could be the death of vacation time in the United States.

Americans are notorious

American companies are notorious for their vacation policies that give just about the least amount of time off in the entire world. Denmark is a much happier place because of time-off and more productive too, as I wrote here. Despite have the least amount of vacation in the world many U.S. workers still don’t take all their allotted time. According to Venessa Wong at Bloomberg Businessweek, as quoted by Anna North, “Already, some 40 percent of American workers don’t use all their paid vacation days.”

The criticism of Branson’s move is that the non-policy states that:

The policy-that-isn’t permits all salaried staff to take off whenever they want for as long as they want. There is no need to ask for prior approval and neither the employees themselves nor their managers are asked or expected to keep track of their days away from the office. It is left to the employee alone to decide if and when he or she feels like taking a few hours, a day, a week or a month off, the assumption being that they are only going to do it when they feel a hundred per cent comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business — or, for that matter, their careers!”

The emphasis in the criticism is the statement that the employee must feel 100% “comfortable that they and their team are up to date on every project and that their absence will not in any way damage the business — or, for that matter, their careers!” The naysayers feel that few Americans will ever have that confidence in their work and thus by that being the provision to live by this policy could actually spell the doom of vacation. Not only will employees not take unlimited vacation, they will resort to taking no vacation because the work is never caught up and most people are unsure of their standing in the company to feel absolutely sure their careers will not be harmed.

There are companies where it does work.

Branson by his announcement got a lot of press, but in reality there are many companies that offer unlimited vacation. The Motely Fool is one such company. If you want to read some testimonials on this policy read the comments attached to Anna North’s article the online version of the New York Times.

Us versus them

One problem I see in these policies is the potential “us versus them” situation that is being set up. These unlimited vacation policies only apply to salaried exempt employees. The Fair Labor Standards Act does not allow them to be applied to non-exempt employees because you have to track their time. That is the basis on which they are paid. Just saying “work whenever you want” becomes very difficult with an hourly, non-exempt employee. Additionally many of those positions are not ones where the employee can just take off anytime they want. Customers have to be served, food has to be delivered, and products have to assembled. That is a much different situation than that of a manager, consultant, advisor, marketing specialist, IT professional, etc.

With this divide what are the employee relations issues that companies will be faced with?

I like the idea of unlimited vacation, but I have to tell you, even I, as an independent consultant feel guilty if I take too much time. I don’t think I am alone in that mental dilemma.

Photo credit: The author from one of his vacations.

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Mike Haberman

Mike Haberman

Michael (Mike) D. Haberman, SPHR is a consultant, speaker, writer of HR Observations, and co-founder of Omega HR Solutions, Inc. After over 30 years in HR he got tired of the past and focuses here on the Future of HR. Connect with Mike.

Reader Interactions


  1. With 12 days of annual leave available, it’s not surprising that the American companies decided to implement the unlimited vacation policy. At least this way the employee has the feeling of Ï can do whatever I want”. Sure, it might get to situations where an employee might end up taking less than the 12 days he’s entitled to, but I think in this case companies should take corrective measures and not let the situation slip out of their hands. No one wants burnt-out employees.


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