The Problem With Microsoft’s New Unlimited Vacation Policy

While the flexibility is nice, the initiative doesn't apply to all and may lead to some employees actually working more

Facade with sign and logo at regional headquarters of computing company Microsoft in the Silicon Valley, Mountain View, California, May 3, 2019. Micorsoft recently announced an unlimited vacation policy
Unlimited paid time off? Yes, there is a downside.
Smith Collection/Gado/Getty Images

It sounds like a work dream: unlimited time off. And there are plenty of upsides to Microsoft’s new vacation policy, but any enthusiasm for the new initiative should be tempered by its limitations — and how people actually use it.

“How, when, and where we do our jobs has dramatically changed,” Kathleen Hogan, Microsoft’s chief people officer, said in an internal memo, per The Verge. “And as we’ve transformed, modernizing our vacation policy to a more flexible model was a natural next step.”

The tech giant’s new “Discretionary Time Off” program only applies to certain salaried U.S. workers. It does include additional approved leave (10 corporate holidays, leaves of absence, sick and mental health time off, jury duty, bereavement time off, etc.). And it’s a welcome addition to the company’s vow to allow more people to work from home permanently.

However, the policy won’t apply to hourly workers or those working outside the U.S. And as we’ve discussed before, the companies that offer these policies tend to benefit more than the workers…who may end up taking less time off.

“People think unlimited paid time off [PTO] is something that should be desired. In reality, people who have an opportunity to take as many vacations as they can will end up taking fewer days off than those with a limited amount of days off in a year. In a nutshell, the unlimited PTO policy is a marketing trick that is supposed to lure people into applying for the job,” Branka Vuleta, founder of, told us in 2021

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For places with these policies, Vuleta also says it’s a cost-saving solution — companies aren’t obliged to pay their employees for their unused vacation days. They’re also less liable since they don’t have to track it and abide by the same rules as companies with a limited vacation policy.

Add in guilt, unclear worker expectations and how others in the office will pick up the workload, and suddenly you’re left with a seemingly well-meaning policy that indirectly may lead workers at Microsoft to not only use less vacation but also do some work while they are technically out of office.

That said, it’s still preferable to America’s strangely limited two-week policy, which is why our country has the second-least amount of PTO in the world. As someone who’s been cheated out of limited vacation days in past jobs — either by “losing” them or being guilted out of taking time off — I’ll take the nebulous leave policy any day (or, since I can, multiple days).

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