While some companies are clawing back days off - usually in a conversion to Paid Time Off (PTO) bundles - an entirely different trend is taking hold at pioneering companies: unlimited vacation days

Netflix, Groupon and Kickstarter are among the tech-savvy companies spearheading this movement.

At cove, a Washington DC shared office space operator, marketing director Erin Gifford said, “We don’t even keep track.”

You want this benefit? Understand: only about 2% of companies offer it, according to estimates by the Society of Human Resource Management. Though some major companies are obviously adopting this trend, many of the others are like cove - a startup or small or both.

Nationally, according to data from the U.S. Bureau of Labor Statistics (BLS), first-year employees average 8.1 paid vacation days. After 25 years, that rises to 17.8 days.

Unlimited is a whole lot more days.

But at least some HR experts think the time may be right for many more companies to embrace this. Matt Cholerton, an HR expert and co-founder of Ping Labs, a performance management company, said, “Savvy employers know that offering unlimited vacation days offers a lot of upsides and while not the norm, is the smarter decision.”

Cholerton elaborated on the big benefits for employers in switching to unlimited vacation days.

“Most plainly, when employees don't accrue vacation time -- as in granting three weeks per year -- then the financial liability of those vacation days is not on the books," Cholerton said. "Employers don't need to be responsible to reserve funds for earned days or pay out employees upon termination. This can be a huge bottom line positive on the balance sheet.”

Cholerton is right. An increasing number of states have voided “use it or lose it” policies regarding vacation days. Companies in those states must track unused days, allow employees to roll over unused days into the next year and compensate employees accordingly when they leave the company.

Know this too: many of us never use all of our vacation days, even in traditional businesses where they are doled out begrudgingly. According to research for Project: Time Off, 41% of Americans do not plan to use all of their vacation days.


But with unlimited time off, won’t employees abuse the system? Apparently not, according to Cholerton. “Research shows that employees with unlimited vacation actually take less days off. When you have three weeks to use in the year, you manage to that number," he said. "When it's unlimited, it's more unclear, and employees are hesitant, perhaps fearing taking time shows the wrong motivation.”

Note: several employees told us they left jobs with unlimited vacation days, because the pressures were intense to use very, very few days. That's not so in every company. But recognize that it happens.

Many other employees say they love unlimited vacation policies. “I recently resigned from a corporation where I had four weeks of paid vacation, in exchange for a company that offers unlimited vacation days," said marketing coordinator Latoya Rogers. "Previously, I would take two ten-day vacations and have four extended weekends for a total of six trips per year. At [my] new current job, I will use the same amount of vacation time as I did with my previous employer. The general consensus is that no one wants to abuse the generosity of our founders,so the ‘unlimited time off’ is used within reason.”

Derek Gleason, who works at a digital marketing agency in Richmond, Va. that switched to unlimited time off last year, said that his company requires employees to take at least two weeks off a year. He added that the company’s co-owners both take vacations and that sends a message from the top: it is O.K. to take days off. “We actually take about the same amount of time off as we did before," he added. "The difference is that we're no longer ‘counting calories.’ When there's a great opportunity to do something, we do it.”

What happens with employees who indeed abuse the system? Some may. And, said experts, they will get fired, because they likely are not fulfilling their work obligations. If you are not getting the work done, no company is likely to keep you around.

Ask Erin Gifford about how hard employees still work in an unlimited vacation company. Although she gets unlimited time-off, she said she maybe uses seven to ten vacation days a year - plus she often will work a Saturday or Sunday if work needs doing. “Some of my colleagues may take less time off,” she added.

You are sold on unlimited vacation days? Ask your boss. Gleason said that’s how it started in his company: “An employee joined us who had been in a company that had unlimited vacation," he said. "She asked why we didn’t.” When the bosses thought it over, they decided to go for it.

Similar may happen where you work. But only if you ask.

This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.

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