Microsoft adopts unlimited time off in the US

Over the past decade, the concept of unlimited paid time off has been growing in momentum.

Rather than having a set number of days that employees can take as holiday every year, the aim of unlimited paid leave policies is to put the power back in employees’ hands. Workers are empowered to manage their own workloads and take time off when they feel they need a break or a reset.

Earlier adopters include Netflix, IBM, Evernote and GitHub. Now Microsoft has joined the fray and followed the example of its subsidiary LinkedIn, which has had unlimited holiday policies since 2015.

Inside Microsoft’s new holiday policy

In an internal memo viewed by Insider, Microsoft shared that from it is no longer going to track vacation time for US salaried employees.

In a statement to UNLEASH, a Microsoft spokesperson said: “Beginning January 16, 2023, Microsoft is modernizing our vacation policy to a more flexible model and transitioning to Discretionary Time Off (DTO). How, when, and where employees do their jobs has dramatically changed and DTO aligns with more flexible ways of working.”

Time off will still require manager approval, as is standard at other companies with unlimited time off policies, and employees with unused annual leave prior to 15 January will receive a payout later this year.

At the same time, Microsoft announced it was offering salaried US employees ten corporate holidays off, plus upgrades around sick and bereavement leave.

Currently, this policy is not available beyond the US, primarily due to different regulations and laws around annual leave. These ex-US employees will therefore keep their existing holiday benefits.

While unlimited paid holiday policies sound generous and a great solution to sky-high levels of burnout, it is important to note they are not a silver bullet.

There are concerns around the strategy – and it is not that employees are taking advantage. Instead, a common outcome of the policy is that workers often end up taking less holiday, this is because employees don’t have a target to aim for.

So, any HR teams thinking about following Microsoft’s lead should think carefully about the guardrails around the policy. There is no point having this policy if it doesn’t achieve the desired result – better work-life balance and more productive work.

Managers, who are the ones approving holiday requests, need to ensure that employees aren’t so over-worked that they don’t feel they can take time off, and that they remind workers of the benefits of a rest and reset.

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