2018-01-31 00:00:00Time TrackingEnglishImplement an unlimited vacation policy in your small business and you can find that, far from abusing your goodwill, your employees take...https://quickbooks.intuit.com/ca/resources/ca_qrc/uploads/2018/02/Employee-Boss-Discussing-Time-Off.jpghttps://quickbooks.intuit.com/ca/resources/time-tracking/employees-unlimited-time-off/Should You Give Employees Unlimited Time Off?

Should You Give Employees Unlimited Time Off?

3 min read

Everyone benefits from a vacation and encouraging, or even requiring, your employees to take time away from the workplace can be vital for your Canadian small business. Some companies are taking this one step further and implementing an unlimited vacation policy. Whilst such a policy might appear open to abuse and certainly doesn’t suit every organization, it can have surprising benefits for both employees and employer.

How Does It Work?

Employees choose when to take time off and for how long. So long as the individual is up to date with work and their absence does not harm the company, this is generally acceptable. The premise is that employees can be trusted to manage their own time and are unlikely to abuse the system, not least for fear of harming their careers.


By showing you trust and value your employees, you are likely to gain increased motivation and greater engagement from your workforce. Companies with innovative cultures, such as many start-ups, appreciate that much work takes place outside of the traditional Monday to Friday nine-to-five and employees perform just as well, if not better, when they’re able to fit in work around personal needs. As well as building loyalty and retaining staff, it can prove easier to attract top employees who view flexible working as a terrific bonus.

This policy can also save on administrative costs. You or your HR no longer have to track and manage leave or pay for unused vacation days at the end of year and can avoid the scramble to use up any remaining leave days.

According to the Society for Human Resource Management, U.S. companies that have implemented unlimited vacation policies have found that employees don’t appear to take off any more time than usual.[1]

Some people choose to use their time off to create long weekends and enjoy a better work-life balance. This can especially beneficial for employees who commute long distances or have to stay away from home and family during the week.


If an individual is absent from work for family reasons, such as parental leave, they need to track their absence carefully to ensure job protection during those qualifying weeks.

Certain job roles don’t lend themselves to a flexible remote-working approach. This includes front-facing staff, jobs that require a person to be present in the workplace, and hourly paid workers. If your company employs a mix of job roles, allowing some unlimited vacation whilst others adhere to the traditional fixed system can cause problems

Employees can be suspicious of your motives, especially if they are used to cashing out accumulated unused vacation days. When the U.S company Tribune Publishing tried to implement an employee vacation policy of “discretionary time off” it had to abandon the plan, as some employees threatened to sue the company for removing the monetary value of many years of accumulated paid vacation days.

If you don’t establish a norm for an acceptable number of vacation days, some employees are reluctant to take off any time at all for fear of being seen to abuse the system. A mandatory minimum number of vacation days per year can help such employees feel more comfortable about taking time away from their desks.

If you’re considering rolling out an unlimited vacation policy, think carefully about your employees, their work patterns, and how they might react. For example, Millennials are more likely to embrace flexible working practices than older workers. Consult with your teams and implement training sessions and guidelines for requesting time off before full roll-out. Find a suitable name ” terms like “flexible” or “self-managed” sound less indulgent and more accurate than “unlimited” vacation. With careful planning, an unlimited vacation policy can lead to a more loyal, motivated, and productive workforce that works with you to boost your company’s success.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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