Does unlimited PTO actually work?

Probably nothing leads to a more heated discussion in office group chats than the concept of unlimited paid time off (PTO). Pitched as the ultimate perk of the modern workplace, unlimited PTO has been used by companies to attract top talent desiring a better work-life balance over traditional benefits.

On the other hand, critics of unlimited PTO see it as deceptive. They argue that it actually makes employees take less time off than intended and, in some cases, are shamed for taking a break. 

While the arguments for and against unlimited PTO continue, how it works in practice is much more complex. So how does this practice actually work in a real workplace?

The promise vs. the reality

Unlimited PTO, also known as discretionary time off, reportedly got its start in the legal industry as a way for law firms to attract talented prospects. It was seen as a win-win: employees can take a break when needed to prevent burnout, and employers benefit from higher office morale and savings from no longer paying for unused vacation days. 

The perk gained widespread attention in the early 2000s when Netflix implemented its controversial ‘No Vacation Policy’. Netflix’s chairman and co-founder, Reed Hastings, argued that being able to choose when to take a vacation made his team more creative. Other tech companies followed suit, with industry giants such as LinkedIn, Dropbox, and HubSpot implementing their own policies. 

The demand for unlimited PTO reached its peak during and shortly after the COVID-19 pandemic. A 2022 Harris poll of more than 2,000 US workers found that 65% desired unlimited paid time off. The perk is especially popular with younger generations of workers, with 74% of Gen Z and 70% of millennials wanting the improved work-life balance it provides, compared to 68% of Gen Xers and just 45% of Baby Boomers.

Despite the popularity, true unlimited PTO is still uncommon. According to the Society for Human Resource Management, only 6% of employers offer it. There’s also little evidence that workers actually maximize the benefits that unlimited PTO provides. A 2022 study by HR software company Namely found that workers with unlimited PTO only took an average of 12 days off per year, only slightly more than the 11.3 days taken by those with traditional PTO.

“Clearly, unlimited PTO has gained credibility as an employee benefit, but to what end?” said Amy Roy, Namely’s chief people officer. “Regardless of their company’s plan, workers seem to be taking less time off.”

The psychological burden

Unlimited PTO has also been known to lead to what experts call "vacation anxiety." While the policy relieves the pressure of using vacation days before they expire, employees now worry that they’re taking too much time off. These concerns, which often lead to employees worrying about appearing lazy or jeopardizing their job security, are widespread; a 2025 LiveCareer survey found that 59% of workers experience anxiety when taking time off from work. 

This phenomenon is often amplified by peer pressure, especially in workplaces with a strong "grind culture." When employees see their colleagues consistently work long hours and rarely take a break, they may feel pressured to do the same to keep up. This can result in a cycle of ‘vacation shaming’, where employees are subtly or overtly discouraged from using the very benefits that support their wellbeing.

Navigating the new normal

So, is unlimited PTO a scam? The answer isn't a simple yes or no. While it can be a powerful tool for fostering trust and flexibility, it is not a magic bullet for improving workplace culture or productivity on its own. Its success depends on thoughtful implementation and effort from both leaders and employees.

As Netflix’s head boss, Hastings emphasises the value of leaders setting the example. “In the absence of a policy, the amount of vacation people take largely reflects what they see their boss and colleagues taking,” he says, adding that managers should set clear guidelines and parameters to ensure a successful implementation. 

When implemented correctly, unlimited PTO has the potential to attract talent, empower workers, and reduce administrative bureaucracy. Ultimately, its success hinges on one thing: trust between the company and its employees. Without that trust, unlimited PTO risks becoming little more than a gimmick.