Unlimited time off for employees can pay off for employers

Unlimited paid vacation, sick and personal days may help health. UPI/Cory Lum
Unlimited paid vacation, sick and personal days may help health. UPI/Cory Lum | License Photo

WASHINGTON, Feb. 18 (UPI) -- Some U.S. employers adopted an unlimited sick days and vacation policy to increase worker productivity and they are pleased with the result, experts say.

U.S. employees work longer hours than most other countries and take the fewest number of vacation days -- more than 500 million are left unused.


An Expedia study using data from the Organization of Economic Cooperation and Development examined the work-life habits of 24 countries and found the work habits of U.S. workers most closely resemble that of Asian countries, where workers average more than 48 hours a week, CNBC reported.

The Expedia study found 76 percent of U.S. bosses support vacation plans, but employees use only 10-of-14 vacation days each year. One-in-4 employees get no vacation days at all.

The Society for Human Resource Management found only 1 percent of U.S. companies are offering unlimited paid time off, but those companies that have adopted the policy such as Netflix said they are happy with the results.

Jonathan Friedland of Netflix told CNBC people "appreciate the flexibility and do a good job of balancing their vacation time with those of others and the work we all aim to get done."


There are numerous studies on how vacations or time off improve employee health, social relationships and productivity. Not only did more time off result in lower healthcare costs, those who took time off had a larger network of friends and family -- a support network other studies found key to survival of diseases such as cancer.

The research found tangible health benefits of lower blood pressure, lower stress hormone levels and smaller waists -- all of which contribute to less risk of diabetes and heart disease -- in those who took their vacations.

A comprehensive study by Ernst & Young showed the longer the vacation employees took, the better they performed.

However, many workers, even before the recession and its millions of layoffs, feared taking time off for any reason.

Companies that tried the unlimited-time-off policy said not only do employees appreciate flexibility in sick, vacation or personal days, the companies save by not having the administrative work of keeping track and allocating time off. In some states, vacation days not taken can be cashed out when an employee leaves, but with unlimited time off, this expense is no longer taken.

In addition, prepaid vacation or sick days no longer need to be included on a company's books, so a company's profit-and-loss statement immediately improves, Bruce Elliott, manager of compensation and benefits for SHRM, told CNBC.


Few employees take advantage of the unlimited-time-off policy, Elliott said; most workers fear taking too much time off could hurt their reputation.

"What we see in some cases is a portion of the population taking less time," he said.

However, usually workers take about the same amount of time off as those employees offered traditional paid-time-off benefits, Elliott said.

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