The following article was first posted by Carmody Torrance Sandak Hennessey LLC as part of the firm’s Carmody@Work labor and employment series. It is reposted here with permission.
In a tight labor market, employers are searching for ways to enhance their benefits to attract new employees and retain current ones.
Some employers are considering unlimited paid time off for their employees. Sound like a crazy idea?
Well, some large companies, like Netflix, Oracle and LinkedIn, have adopted such policies.
Unlimited PTO is what its name suggests. Employees neither accrue nor are they assigned a fixed number of PTO.
Instead, employees can take paid time off when needed, provided employees keep up with their workload and their absences do not disrupt business operations.
This provides employees significant flexibility.
A primary reason why employers adopt an unlimited PTO policy is because employees like it.
A survey conducted by MetLife in 2019 found that 72% of employees favored an unlimited PTO policy.
Therefore, such a policy can be a real morale booster and an important benefit to offer prospective employees.
Employers who adopt unlimited PTO also strive to build a culture of trust by allowing employees to use their discretion as to when and how much leave they can take while still fulfilling their job duties and responsibilities.
Pros
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