As Microsoft Adds Unlimited Time Off ‘Perk,’ When Is It Really to Employee’s Benefit?

Mountain View, USA - March 4, 2015: Microsoft sign at the entrance of their Silicon Valley campus in Mountain View, California.
NicolasMcComber / Getty Images

Microsoft announced its U.S. employees can take unlimited time off, a perk it calls “discretionary time off,” which will start Jan. 16. While this seems like a dream benefit, some experts argue that because of its inherent ambiguity, it might actually not be as rosy as it seems.

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The Verge reported that the announcement was made in an email to employees from Kathleen Hogan, Microsoft’s chief people officer, on Jan. 11.

“How, when, and where we do our jobs has dramatically changed,” Hogan said in the memo. “And as we’ve transformed, modernizing our vacation policy to a more flexible model was a natural next step.”

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The new changes mean that new employees don’t need to wait to accumulate vacation days. The Verge added that the company — which also owns LinkedIn — will offer “10 corporate holidays, leaves of absence, sick and mental health time off, and time away for jury duty or bereavement alongside this new unlimited time off policy.” In addition, for those who have unused vacation days, they will get a one-time payout in April.

This perk, however, can become problematic when managers require work or duties that leave little or no room for employees’ time off, Bloomberg explained.

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A Microsoft spokesperson told Bloomberg that the company had taken this factor into account and that it will ensure workers get adequate vacation time.

In addition, this benefit can be a blessing for employers, as “employees who quit or are fired don’t have to be compensated for accrued, unused time,” Bloomberg explained.

Katherine Dumanoir, a sourcing lead at Microsoft, said in a Jan. 11 LinkedIn post that for the policy to be a success, one has to work for a good boss or leadership, take accountability for work responsibilities, and make sure they actually take time off.

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“Only reason why I am a skeptic of unlimited PTO is because there’s no protection for the employee. It’s at the discretion of leadership and there are no pay outs for days not used in the case of a layoff. Will your days away be used against you if they are greater than your colleagues? What is an appropriate amount to take?” she wrote in the post.

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Dumanoir added, however, that the reasons she likes this change is that for employees who working hard and hit goals, they won’t be limited in the amount of time they can take off. This, in turn, could serve as motivation if utilized correctly.

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About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.
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