What to do when your employees abuse your unlimited vacation policy

Offering paid time off is standard practice among U.S. companies. Offering it in an unlimited fashion is far less common, and a good way to both attract and retain talent in a competitive job market.

Unlimited vacation policies aren't just good for employees, though. In many cases, employers benefit just as much. When vacation days aren't tallied, employers don't have to worry about paying workers for unused time. Just as importantly, limitless vacation setups often lend themselves to better worker productivity. When employees are given the leeway to take time off as they please, they tend to return the favor via increased output when they are on the job.

Not only that, but in many cases, unlimited vacation policies lead to less time taken away from the office, not more. That's because employees are cognizant of the fact that they need to take time off in a manner that doesn't negatively impact their performance, and are therefore more judicious about being away from their jobs.

But what happens when your employees take advantage of your generous time-off policy? Should you revert back to your old setup, or attempt to power through?

Seeing your new policy through

When you find that employees are abusing an unlimited-vacation policy, your first inclination may be to simply go back to your previous policy. But doing so could result in some backlash.

Chances are, not every employee of yours is taking advantage of that new policy, and it's likely that your most reliable, valued workers are using it fairly. To take that benefit away from them might therefore feel like a slap in the face.

Furthermore, if you go out of your way to talk up your limitless time-off policy and then rescind it, you might alienate strong prospective hires in your pipeline, as well as future hires for roles you'll one day be desperate to fill. A better bet, therefore, may be to clarify your policy rather than rush to do away with it.

For one thing, make it clear that while workers won't be limited to a preset number of vacation days, approval of time off is still at your managers' discretion. Employees who are behind in their work, or who have pressing deadlines looming, need to catch up or secure coverage if they want those requests approved.


Additionally, make it clear that taking too much time off -- to the point where it negatively impacts performance -- could affect employees' career progression, raises, bonuses, and, in more extreme cases, job security. Reiterate that unlimited time off is a privilege, and that workers who abuse it will face unwanted consequences.

If you find that your staff is still taking excessive time off after you clarify your policy, it may be time to rethink it -- but make it known that if the current pattern continues, that flexibility will indeed go away.

Remember that if unlimited vacation is a new thing at your company, it may take some time to work out the kinks. Be patient as that policy creeps toward its first anniversary, and recognize the fact that your employees are trying to navigate it themselves. With any luck, the right communication around the policy will nip abuse in the bud, so that everyone benefits from it as you initially intended.

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