Unlimited Vacation Time

Running a Business

The benefits of a flexible vacation policy mean that more companies are expanding their perks to include it. Is it something that could work for you?
While it might seem like a far-fetched idea, unlimited vacation time is actually an affordable way to recruit top talent, and get the most out of your existing team.

Employees who vacation regularly are more engaged, happier, productive and less likely to leave due to burnout. It’s also not as expensive to implement as you might think. Because many employees don’t use their allotted traditional paid time off every year, most companies end up paying out accrued time off. In the long run, everyone wins if the time off is taken instead of converted to a paycheck.

Offering unlimited vacation time is an attractive perk for prospective hires too. Glassdoor found that a good vacation policy is the second most important benefit prospective employees look for, just after health care. Because unlimited vacation time is getting more popular as a perk, even outside of the tech world, it means that your hiring team will be recruiting top candidates expecting it.

Some things to think about

Ready to try it out? Not all unlimited vacation policies are created equal. In order to make it work for your company, you’ll need to adapt a policy to fit your values and business needs. Here are a few things you might want to consider:

Minimum Vacation Policy

Almost every company that adopts unlimited vacation policies (including us!) find that most employees take less vacation time. Without guidance, employees worry that they will be seen as taking advantage of the policy, and it becomes a race to the bottom on how few days everyone can take off.

To make employees feel more comfortable, many companies suggest a minimum vacation time – somewhere between three to five weeks. Alternatively, companies like Buffer and Evernote have offered $1000 annual vacation stipends to encourage their staff to take full advantage of their paid time off.


Local employment laws may require some exceptions to your unlimited vacation time policy. Some states, such as California, require vacation pay for hourly workers. In other countries, there might be laws around minimum vacation time, and you’ll need to pay out the balance of days off remaining at the end of the year. The vacation policy also needs to be distinguishable from a maternity or medical leave plan. Thinking ahead for any legal issues means you can build it into the policy (and your budget) fairly.

Preventing abuse

The scariest thing about opening up unlimited vacation time is the fear that half your employees will head to the beach for the next three months. In reality, this rarely happens. Abuse is the exception not the rule.

However, a little caution is always wise. To prevent abuse, it’s essential to be confident in what high performance means to your teams before unveiling a new leave policy. If you don’t have a way to measure performance, it will be difficult to tell when employees meet their targets before going on holiday. Being clear and communicative about what is expected of each team member is the best way to help them manage their own work-life balance.

Vacation Culture

Even the best policies will fail if not supported by leadership. If you want your team to take vacation and enjoy the benefits of switching off periodically, you need to set a good example. This means taking vacation time, turning off devices and leaving work behind.

It’s also important to build a supportive culture around time off. Instead of piling up work for a vacationers’ return, support their transition back from holidays. In staff meetings, ask how the time off was, and share pictures from that epic trek they did through Costa Rica. Constantly emphasizing the importance of rest and recharging will make sure every employee feels empowered to manage their own well being – without the guilt trip from HR.

Making it happen

Because vacation time is accrued annually, it makes the most sense to start a new policy at the beginning of the calendar year, to keep it fair for anyone who might have been saving their paid time off. To roll out a new policy, you’ll want to make sure everyone is up to speed, and your HR team is ready to deal with any edge cases.

  1. Create a draft of your new policy with hiring managers, the HR team and finance department.
  2. Run it through a legal and gut check. Does it make sense and work fairly for all of your employees?
  3. Create an FAQ document for your team to set out guidelines and provide more information about how the policy works. Does the method of booking time off change? How many days are they expected to take off?
  4. Announce the new perk, and ensure everyone knows where to go with any questions.
  5. Continue to keep track of time off people take. Is it consistent across all teams? Are there people taking advantage of the policy, or not taking enough time?
  6. Review and adjust the policy as needed.

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