The Down Low on Unlimited Vacation Days

Does your company offer unlimited paid vacation days or sabbaticals? Employees of companies like IBM, Netflix, Evernote, Chegg, and Twitter are able to take as much time off as they want. If you are an employee of Intel, after 7 years of working for them, you can take a fully paid 8-week sabbatical. About 3% of businesses offer unlimited vacation time and 15% of organizations offer sabbaticals.1 If this sounds amazing as an employee or absurd as an employer, let’s explore the risks and benefits of unlimited vacations, and the optimal vacation policy that can1) increase productivity and efficiency and 2) increase employee satisfaction and happiness.

So why should you offer vacation to your employees in the first place? Vacations serve multiple purposes, including relieving employees’ job stress, preventing burnout, relaxation, and increasing leisure satisfaction (positively correlated to work satisfaction).1 Also, vacations can improve the work-life balance by offering more time off for employees to focus on their non-work lives and create higher morale within the company culture. Although federal rules do not require paid vacation time off, most companies offer at least 10 days of vacation time. Having a good vacation policy in place can also be attractive for potential employees and retaining good talent.

What are the benefits of having an unlimited vacation policy? First off, unlimited vacation policies have positive effects on employee job satisfaction. Even though the employee may not be taking a high number of vacation days, having the flexibility empowers them and has employees worrying less about how many vacation days are left. It also opens a window of opportunity for professional development, contributing to increasing the quality of employees. Also, unlimited vacation policies had a positive effect on perceived productivity. As employees are able to take time off when they want and need to, they are better able to focus on the days they are working and also get a boost of creativity. Some companies have also reported employees having increased accountability and responsibility over their own work and maturing the culture.

Obviously, unlimited vacation policies are not fit for every company. A few key components are necessary for unlimited vacation policies to work. This includes a strong trust component between the employees and management. Employees need to be able to take charge of their work and make sure that their work is not compromised by vacations. Trust flows both ways, as employees need to be committed on getting their job done and management needs to trust that employees will do the right thing. Healthy communication between employees and management is also essential. Even though employees may have unlimited vacation days, making sure that there is availability of employees if needed and decreasing uncertainty ensures a healthy work environment. In addition, leadership need to show by example that it is acceptable to take vacation days off and employees are not going to be penalized for it.

Unfortunately, there is no one-size-fits-all vacation policy that works for every company. Depending on the staffing needs, whether your employees are hourly or salaried, nature of the work of the company, vacation policies need to be adjusted. Ask your employees what their needs are when it comes to time off. Have an open conversation and come to an agreement on a vacation policy that addresses everyone’s needs. Your vacation policy can be a way to show that your company respects and cares about employee wellbeing. For more information on how to build a sustainable culture of health, contact Will Yeaton at or 602-509-4023.


  1. De Jong, C., and Östberg, L. “Unlimited Vacation Policies: Their influence on employees.” (2015).
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