Paper Trails

What is Unlimited PTO?

When debating a job offer, most employees consider the benefits offered as a huge part of the final decision.  In fact, according to a study by PeopleKeep, 93% of employees consider paid time off as a highly important company perk.  That’s why in this article, we dive into the world of paid time off, and specifically unlimited PTO.

At Paper Trails, we believe in equipping business owners and HR professionals with the knowledge they need to make informed decisions that keeps in mind both employee engagement and company growth. This article will provide insights on unlimited PTO including what it is, why you should consider offering it, how to effectively manage it in your business, and what pitfalls to avoid. Our mission is to empower you with insights and best practices, so you can create a workplace that attracts top talent and retains valuable employees.

What is Unlimited PTO?

Unlimited paid time off (PTO), is a progressive and flexible approach to employee leave. Unlike traditional PTO policies that allocate a specific number of vacation, sick, and personal days, unlimited PTO gives employees the freedom to take time off when they need it, without strict limitations. It’s about focusing on results rather than tracking hours in the office.

In essence, with this type of PTO, employees have the autonomy to manage their own time off within the bounds of reason and company policy. This approach places trust in your workforce to make responsible decisions regarding their time off, which can lead to increased job satisfaction and productivity.

Why Offer Unlimited PTO?

Now that we’ve defined what unlimited PTO is, let’s explore why your small business should consider adopting this innovative approach:

1. Attract and Retain Top Talent

In a competitive job market, offering unlimited time off can set your business apart from the rest. It’s an attractive fringe benefit that can help you attract and retain top talent. Prospective employees, especially those from younger generations, often prioritize work-life balance and flexibility. By offering this PTO, you demonstrate your commitment to meeting their needs, making your company more appealing.

2. Increased Employee Engagement

Unlimited time off can boost employee engagement. When employees feel trusted and empowered to manage their own time, they tend to be more engaged and motivated. This increased engagement can lead to higher job satisfaction, improved morale, and ultimately, better performance.

3. Cost-Efficiency

Surprisingly, unlimited PTO can be cost-effective for your business. Without the need to accrue and track specific PTO balances, HR departments can save time and resources. Additionally, when employees take time off as needed, they are less likely to come to work when they are unwell and are likely to produce poor results.

How Do I Manage Unlimited PTO in My Business?

Implementing unlimited PTO in your small business requires thoughtful planning and effective management. Here are some best practices and key steps to consider:

1. Develop Clear Policies

Craft comprehensive and clear PTO policies that outline the guidelines for unlimited time off.  Be sure to have this policy included in your employee handbook. Specify how employees should request time off, notice periods, and any blackout dates when unlimited PTO might not be available due to business demands.

2. Communicate Expectations

Ensure that all employees understand the new unlimited PTO policy. Hold meetings and provide written materials that explain the guidelines and expectations. Encourage open communication so employees feel comfortable discussing their time-off plans.

3. Set a Good Example

Leadership should set a positive example by taking time off when needed. This demonstrates that this type of PTO is genuinely encouraged and not just a policy on paper.

4. Monitor and Adjust

Regularly review and assess the impact of unlimited PTO on your business. Monitor attendance, productivity, and employee satisfaction. Be prepared to make adjustments to the policy if necessary to ensure it aligns with your business goals.

What to Look Out for If Offering Unlimited PTO?

While unlimited time off offers numerous benefits, it’s essential to be aware of potential pitfalls:

1. Abuse of the Policy

Without proper management and oversight, some employees may take advantage of the unlimited PTO policy. Monitor for patterns of excessive time off and address them promptly to maintain a fair and balanced workplace.

2. Business Continuity

Plan for potential disruptions to business operations due to employees taking time off. Develop strategies for coverage during peak times or key projects to ensure business continuity.

3. Legal and Compliance Issues

Ensure that your PTO policy complies with all relevant labor laws and regulations on employee paid leave.


Unlimited PTO is a forward-thinking approach that can enhance your small business in many ways. By providing flexibility and attracting top talent, you can create a workplace where employees thrive and your business flourishes.

At Paper Trails, we are committed to helping you navigate the evolving landscape of HR and business management. You can download a sample policy here that you can configure for your business.  If you have questions or need guidance on implementing unlimited PTO or any other HR-related topic, feel free to reach out to our experts!