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Microsoft Businesses

Microsoft Employees Are Getting Unlimited Time Off 151

In a memo seen by The Verge, Microsoft's chief people officer, Kathleen Hogan, announced that the company is giving its U.S. employees unlimited time off. "Microsoft is calling its unlimited time off 'Discretionary Time Off,' and it will apply to all salaried U.S. employees," adds The Verge. From the report: The changes will start on January 16th and mean even new Microsoft employees don't need to wait to accrue vacation time anymore. Microsoft will offer 10 corporate holidays, leaves of absence, sick and mental heath time off, and time away for jury duty or bereavement alongside this new unlimited time off policy. Employees that have an unused vacation balance will get a one-time payout in April.

Hourly workers at Microsoft won't be offered the unlimited time off, nor will employees outside the US. Microsoft says federal and state wage and hour laws make it difficult to offer unlimited time off to hourly workers, and those outside the US will keep their current vacation benefits because of different laws and regulations in other countries.
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Microsoft Employees Are Getting Unlimited Time Off

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  • by seichert ( 8292 ) * on Wednesday January 11, 2023 @07:47PM (#63201262)

    Employees will probably still need manager approval for time off. I could see this turning into "No Time Off". Am I being too cynical?

    • by geekmux ( 1040042 ) on Wednesday January 11, 2023 @07:53PM (#63201278)

      Employees will probably still need manager approval for time off. I could see this turning into "No Time Off". Am I being too cynical?

      No "time off" means the company does not have to legally accrue and hold in reserve every outstanding PTO hour due to every employee.

      Gut feeling this has fuck-all to do with offering the employees a gift horse, and everything to do with what the corporation has to hold in minimum reserve to cover legally obligated debts. "Unlimited" is rather hard to put on a ledger, so the number becomes essentially zero.

      • by quall ( 1441799 ) on Wednesday January 11, 2023 @08:00PM (#63201300)

        They save money because now they don't have to pay out unused vacation for employees when they leave. That's a big savings, and they got it for free because they are not likely to approve more PTO than what was original being offered (3-4 or so weeks).

        • It's worse than you think. Unused accrued entitlements scale with grade and pay. If you have an employee with 50 days off accrued, and that employee gets promoted and a 25% pay increase, you now on the hook for 25% higher costs on those leave days. That really starts to bite across the corporate portfolio, and there's a reason a lot companies where it is allowed have limits to how long entitlements are valid (and they typically expire before the pay review cycle).

        • Why do they have to pay out unused vacation? I've never left a job and got paid for my unused vacation days.

          • Many solid blue states have laws that say once vacation is earned, it cannot be taken away

            So no "use it or lose it" and must be paid out.

            • by tlhIngan ( 30335 )

              Many solid blue states have laws that say once vacation is earned, it cannot be taken away

              So no "use it or lose it" and must be paid out.

              One of my previous companies did the same thing. We got acquired, and somehow they failed to realize that the majority of use had at least 20 days accrued.

              It only took a month after the acquisition where they announced they were going to unlimited PTO. First question asked from the US employees was what happened to accrued vacation and they said it was gone. (Surprised, si

        • by Shaitan ( 22585 )

          Yup and it should make people nervous because when this really has a big impact is during mass layoffs.

          It doesn't matter if they approve more PTO than was originally being offered. For salaried staff PTO and Vacation are benefits which are paid by your co-workers (or yourself working a higher density to catch up on your return) not the company.

          The trade off is that they can't realistically include it in the value of a compensation package anymore. In the short term it won't make a difference but after the l

    • by lsllll ( 830002 )
      That is a good point and, as they say, the devil is in the detail. Until the hard words from the employee manual/contract are posted somewhere, it's hard to know if it'll be abused like that. But, look at the other side of the coin from Microsoft's side. If an employee has an integral role in some implementation that's coming up, must you allow the employee to take a European vacation for 2 weeks a month before launch? Or am I too used to smaller teams that the times of some key players (who paid accor
      • by ghoul ( 157158 )
        Having PTO doesnt mean you dont need manager approval to take vacation. All this really changes is that it allows you to take a longer vacation during a lean period in the project even if you havnt accrued the days. During crunch times your leave is not going to get approved regardless of whther you have accrued PTO or unlimited. Thats the benefit to employee. Benefit to employer is they no longer need to pay cash at the end of year for PTO accrued beyond cap.
    • Probably.

      My employer offers unlimited time off. I've never had an issue getting approved.

      I generally don't really ask for time off, though. I inform my supervisor I am taking time off to give them an opportunity to bring up any issues in scheduling. The "approval" is just a digital record of the schedule.

      • by ghoul ( 157158 )
        When I worked in Europe we had 6 weeks of vacation and WE TOOK IT. But that also meant the time had to be planned. We had an Excel on a shared drive where everyone put in their vacation plans for the year at least 6 months in advance And if it looked like too many people will be out at the same time either Project timelines were adjusted or if not possible people were asked to tradeoff. So if someone was taking time off for honeymoon or visiting a different country they got priority and the person who was
      • Same. I can certainly see how things could go wrong if my manager was trying to make my life miserable, but on the other hand, I found "no/unlimited time off" to work great for me. You no longer have to wonder if you're taking half a day off, a full day off, or even whether you have enough days left to take your christmas week off at the end of the year. You just work when you can, being reasonable. Similarly to when you're sick, you just inform others in your team that you'll do the best you can considerin

    • Employees will probably still need manager approval for time off. I could see this turning into "No Time Off". Am I being too cynical?

      I imagine that they still have to get some work done. Otherwise a person could come in on their first day, and take mental health days off and never come in again.

      It's probably "unlimited" the same way that Internet access might be advertised as unlimited.

      You probably don't just get hired and disappear forever, fully paid.

    • by robot5x ( 1035276 ) on Wednesday January 11, 2023 @10:41PM (#63201756)

      I'm a manager, and if my company implemented this I'd make sure that I kept a record of my team's leave and MADE SURE that they were all taking at least the equivalent of PTO they had before.

      I like and respect my team, and any sane person understands that 20 days a year, or whatever, is even not enough to have a good work/life balance - some have kids, some are carers, some have health issues. Are there really managers out there who are trying to scam their reports out of leave? I honestly find it baffling.

      • by sd4f ( 1891894 )
        All that matters is that some higher ups look at the balance sheet, and see PTO as a huge liability. They probably negotiated for themselves a nice bonus if they figure out how to move that liability over towards the asset column.
      • Re: (Score:2, Interesting)

        by Anonymous Coward

        I'm a manager, and if my company implemented this I'd make sure that I kept a record of my team's leave and MADE SURE that they were all taking at least the equivalent of PTO they had before.

        I like and respect my team, and any sane person understands that 20 days a year, or whatever, is even not enough to have a good work/life balance - some have kids, some are carers, some have health issues. Are there really managers out there who are trying to scam their reports out of leave? I honestly find it baffling.

        Thank You. My previous company switched to unlimited PTO and it caused a number of challenges.

        ===========
        1) We found anything over 20 days got flagged for review by HR, even if it was approved by the reporting manger. This was never publicly announced but we all knew about because the first person who took more than 20 days after the switch was not pleased by the hassle it caused.

        2) We were allocated additional compensation time for (reasons) and we had no way of tracking that additional compensat

      • There's no shortage of managers who still believe in man months. To them, less time at work means less work gets done. That's it.

    • by SoftwareArtist ( 1472499 ) on Wednesday January 11, 2023 @11:43PM (#63201860)

      "Unlimited time off" usually ends up meaning less time off. If you have a fixed number of days off, there's no guilt about using them. When you go on vacation, people don't think you're lazy. You're just using the days you've accrued. With unlimited time off, you have to second guess whether you're taking too much time off. Does it look bad? Is everyone noticing you're out and thinking you're lazy? How much time off is everyone else taking? Will you lose a promotion if you take more time off than someone else?

      The result is people taking less time off. It's great for the company. They get to look generous at the same time they're making people work harder.

    • Unlimited time off has been shown to be bad for employee and employer.

      Studies show that people take LESS vacation time when offered "unlimited". No one wants to be the person others think is using too much and abusing it. At least with a set number of vacation days, that's not the case, as you're only taken what you've been explicitly given.

      Employers like it, because 1) as mentioned above, it means people taking less time off, and 2) it means they don't have to pay out banked vacation time when someone leav

    • by Shaitan ( 22585 )

      How it works out depends on your position and manager. The company I'm working at has "unlimited time off" for a couple years now. Be a grown-up. Make sure you'll have coverage and/or everything is settled enough to wait until you return. If you can't do that then it should actually be something serious.

      I work a combination of projects and operational related activities. I've never had time off rejected but I do (and always did) actually consider what is going on at work when planning my time off. Technical

  • Nice (Score:4, Interesting)

    by youngone ( 975102 ) on Wednesday January 11, 2023 @07:48PM (#63201264)
    I'm trying to see how this makes me hate Microsoft more than before, but it seems like a great thing.
    I'm obviously missing something.

    Maybe every time someone takes a day off their boss kills a puppy.

    • Re: (Score:3, Insightful)

      by Software ( 179033 )
      This is being done for two reasons:
      1. 1) for employees in California, accrued / unused PTO must be paid out when the employee departs.
      2. 2) accrued PTO is a liability that must be reported as such on the balance sheet and income statement (which makes sense under #1, given that it must be paid out, but it was recorded as a liability even before the California law).

      By going to unlimited PTO, there is no more accrual, so there is no more liability and no payouts when people leave.

      That said, I've spent the l

      • I worked at a company where you were alloted all your PTO for the year on Jan 1st. There was no accrual and no rollover to the next year.

        Yet they still had a line in the company handbook about how all "accrued PTO will be paid out upon termination." I imagine that semantic trick was a nasty surprise to many outgoing employees who'd been saying their vacation time for the holidays, especially the few who had actually read the policies.
      • In CA, accrued vacation has a value at hourly rate. Is MS going to pay that to CA employees when this new deal starts? If not, CA employees should book and start that vacation now before the changeover date because it is their entitlement.

    • Besides the lack of transparency into what others are getting (similar to salary) . . .

      1. Most probably read "unlimited" as no maximum, but I suspect it more likely means there's no minimum anymore.

      2. If you're not accruing vacation anymore, there'll be nothing to "payout" when you're terminated.
      • How secret is vacation time? I know when all my coworkers are taking vacation and sick days. It's on the schedule or in Slack so we know not to bother people while they're out.

        • That's a good point and maybe "secret" is the wrong word.

          I guess the raw data is there if you want to add it up yourself. But it's different from simply knowing up front that everyone gets the same amount of PTO (barring an extra week or two for people who've been there for years).
    • Re:Nice (Score:5, Insightful)

      by mobby_6kl ( 668092 ) on Wednesday January 11, 2023 @08:01PM (#63201306)

      In practice it's not really unlimited and people often end up being pressured into taking less time off.

      Can I fuck off to a tropical island for three months over the winter? Not without getting laid off at the closest opportunity eh? Then I'd rather have my 25 days that everyone understands I will take off.

      • I have a buddy who asked for a couple months off so he could bike ride from Canada to Mexico. His employer approved it. If the requests are generally reasonable and you have any value as an employee, most employers will want to work with you to keep you happy.

      • by ghoul ( 157158 )
        Schedule it so that you leave after one release and come back before the next release and it might get approved. Most places I worked had a 3 month or 6 month release cycle. For the 3 month cycle it would be super easy, PM will simply not count you in for that release. For a 6 month cycle you may have to take on a slightly different role for that one cycle so you are not on the critical path, maybe do testing instead of development or vice versa depending on where in the cycle you are taking the leave. Fact
        • In my area we don't have distinct releases, there are always some ongoing concurrent projects that people are working on.

          In the last few years there was maybe one month where nothing much was actually happening inbetween some organizational changes where this could've worked. Otherwise you always have to take it at the expense of delaying some work.

      • Most likely, we all work with at least one person who seems to be impervious to the anxieties that so many of us experience on a daily basis.

        A significant percentage of the time, said person is also among the least productive people on the team, but no matter how much time off they take, or how little they get done, they ever seem to be in jeopardy. It's a mystery for which I have much envy.

        So far in my two years of experience with "unlimited vacation", it's this person on each team who always seem

    • Yeah, this is really a cost cutting move. Companies have to pay outstanding vacation balances when an employee leaves, but with unlimited time off the balance is zero. So Microsoft no longer has to put unused vacation time on their books.

      In practice, usually "unlimited" is unlimited but requires manager approval, and they can refuse your request if they think it will negatively impact the project, is excessive, etc... Also there's no protections for employees getting penalized for taking too much vaca
      • Unlimited time off where I work. I generally take a day off every two weeks just to chill and handle personal stuff. Then a two week vacation to go do something. Then a few five day weekends to visit family or what-not.

        Works out to about 6 weeks a year. Which is the rate my PTO was accruing before we switched to unlimited.

        Seems fair.

      • Oh, so a cynical way of screwing the workers while pretending to do something nice?
        I thought it might be, I just couldn't figure out how they were going to make people's lives worse.
    • I'm trying to see how this makes me hate Microsoft more than before, but it seems like a great thing. I'm obviously missing something.

      Yeah the fact that on the other side of the Atlantic there are half a billion people in Europe with a legal entitlement to a minimum 20 days paid leave mandated in law in the EU Working Time Directive. Every employee in the EU is entitled to a minimum 20 days, many member states have even more. Here in the UK the statutory minimum paid annual leave as mandated in law is 28 days and both in the UK and EU if you don't take any leave an employer has to force you to take a minimum 20 days.

      • Yeah, I get it. Where I live we get 20 days per annum which seems like the bare minimum but is obviously great compared to what the average American gets.
      • by pjt33 ( 739471 )

        I believe that the numbers you give have different meanings, in that the EU one is 20 days plus public holidays, whereas the UK one is 28 days including public holidays (which works out to about the same).

    • by GuB-42 ( 2483988 )

      "Unlimited" goes both ways. No upper limit but no lower limit either.

    • Vacation is going from something you earned that the company owes to you to something you have to go ask and beg for each time at the discretion of management. Use too much and you might get canned for it under At-Will employment laws. Your boss will be heavily pressured by his productivity metrics to have employee butts in seats as much as possible.

      Everyone I know who has had this despised it.

      • Well, I won't because the country I live in has some (not very good, but better than yours) worker protections, but I do take your point.
    • I hope it's not like what happened when I was there.

      They announced an initiative to encourage employees to pursue work-life balance.

      Most didn't believe them but some did. All those who balanced their lives got fired.

      • Yeah, I'm understanding that now. You're not the first to reply something along those lines.
        Ah well, I suppose it's just a part of the pursuit of endless profit growth.
  • My employer did the same and it was to save money. I still use the same vacation time at most (3-4 weeks plus holidays), but now I don't get a month's pay when I leave the company (or whatever days I have remaining).

    • by ichthus ( 72442 )
      Same. My previous employer implemented the same policy. So, that year, I took 6 weeks of PTO. At year's end, I was told that my six weeks was "excessive". Hmm, strange, because under the old policy of accruing PTO, I would have had six weeks, and it wouldn't have been excessive.

      You're right -- it's all about the financial liability of accrued, paid time off.
  • This Old Chestnut (Score:4, Interesting)

    by WhoBeDaPlaya ( 984958 ) on Wednesday January 11, 2023 @08:09PM (#63201322) Homepage
    Unlimited PTO sucks for various reasons. Would rather have a contractually defined amount for which you can hold the employer legally accountable, and can cash out when leaving.
    • Company was acquired by a larger entity last year.
      Cashed out 300 hours of unused PTO (part of conditions of acquisitions), which was made for a VERY nice first paycheck for 2023!
      Would have been bupkis if the previous PTO policy had been unlimited.
  • by Computershack ( 1143409 ) on Wednesday January 11, 2023 @08:13PM (#63201332)
    Ten, a whole ten days? Wow how generous....giving them HALF the EU statutory minimum annual paid leave that every employee is entitled to and just over a third of what the legal minimum is here in the UK.
    • No, that's typically in addition to your discretionary PTO. Also, some of them maybe be multi-day holidays breaks, like a holiday break between Christmas and New Years, or Thanksgiving, which is always on a Thursday, but the company may also give Friday off.

    • by boskone ( 234014 )

      Umm, that's 10 days that the whole company closes. It's in addition to sick time and vacation time.

  • by Somervillain ( 4719341 ) on Wednesday January 11, 2023 @08:34PM (#63201402)
    ...our employees take less time off because no one reminds you if you don't use them up. They also take a lot less sick days. Your time off is at manager discretion. So you take a sick day? With a vacation/sick day pool, that day has monetary value. If you make me work on my day off due to some unforeseen emergency, I take another day off or don't record the day off and get compensated as if I actually worked the day off.

    With unlimited time off, when my manager agrees to a day off, but needs to contact me...well...there's no penalty to anyone but me. I don't get money (indirectly in the form of an unused sick day) if they call me...and I risk annoying my reporting hierarchy if I ask for another day in compensation of having to work on my day off.

    I greatly prefer it when explicit monetary value is placed on my time off. I get it that emergencies happen and they may have to contact you, but with a monetary value system, at least I can get paid for my troubles. With unlimited time off, I need to ask permission for both the time period and the amount. With a pool of days off, I am owed the time off...I just need to schedule it responsibly with my team.
  • by UID30 ( 176734 ) on Wednesday January 11, 2023 @08:35PM (#63201406)

    I had that benefit at my previous company. And yeah, you can take as much time as you want. And yeah, if you cross some invisible line in the sand they can fire you. And no, that is not why I am no longer there, although that would be amusing.

    What this came down to was accounting. You see, when employees accumulate time off, that counts as DEBT on the accounting books because it has to be paid out even if an employee leaves. By doing this, the company effectively wipes that slate clean. Now, they will likely make a payout to all employees for this time, so it is not like they are cheating them in any way (at least that is what happened at my previous company).

    The real kicker here is that in the future, that accounting DEBT will no longer accrue, thus making the books look better on their quarterly SEC reports.

    • Yup. I work for a company (in the USA) where I currently have 30 PTO days a year, plus a week of dedicate wellness days, plus corporate holidays (we get a decent amount of those). I very regularly take1 day a week off every week of summer (think about it, that's only 12-15 PTO days and still gives alot to use the rest of the year). I love that I get to spend an extra day with my family not working during the summer.

      I interviewed at a position at a company with "unlimited time off" and I asked them if tha

  • So you go to your boss and say: "thanks for hiring me last week, I'll see you in 2024 because I'm taking 12 month off of my unlimited time off right now"?
    Life can't work like this. How does this work in practice?

  • If you don't accrue vacation time, when you quit, there is no unused vacation time to pay out. It's not a benefit, it's a subtle pay cut.
  • killedbymicrosoft.com
  • Or better say 2600 (10 years) before they can fire me?

  • just ask Elon is about to reverse that Twitter perk.

  • Unlimited time off means no more accrued vacation hours that you need to pay out when you lay off workers.
  • First, you can't actually take unlimited time off. You will be slaughtered in your reviews and the manager will have words with you before that if you cross an invisible threshold (which is about as many days off as you had before, or fewer). Even if you get your assigned work done, Protestant work ethic will get you.

    Second, if you saw that you have 200 unused hours under the old regime, you might actually feel that you should use some of that and take a vacation (yes, I know this is a very American Probl

  • Unlimited time off also carries a policy of "it doesn't accrue"

    Don't use it, you don't walk out the door and get paid for it either.

    It's a really cute con

  • Not having a fixed vacation policy puts both managers and employees in a very difficult position of trying to figure out what is reasonable. If you get say 4 weeks per year, then its clear - busy or not, personal reasons or not, thats what you get and get paid for. Unused vacation accumulates and gets paid out when you retire

    "Unlimited" really means "some secret amount we won't tell you and may vary by manager". For the employee there is a constant worry that their vacation time will be seen as negativ
  • Everyone understands that 'unlimited time off' means nothing, and generally turns out to be very limited time off because of self- and peer-pressure.

    I guarantee you if someone took 300 days off, they would no longer be working for Microsoft.

  • by takochan ( 470955 ) on Wednesday January 11, 2023 @10:50PM (#63201782)

    Its actually "Undefined Time Off".. What this actually means is that vacation no longer accrues and therefore is not owed to you (and more importantly) no longer needs to be paid off by the company when you leave (or more likely these days, when they lay you off) as it no longer "accrues" legally as a liability to you.

    Renaming "Undefined" to "Unlimited" is just a weasel word change to make it sound like something its not. The purpose of this change is for companies to legally avoid paying you for your owed vacation when you leave as it is legally now "no longer owed". Oh, and BTW, it is certainly not "unlimited" in any way in case anyone was wondering.

  • Given the quality (or rather, lack thereof) of the software that Microsoft produces, it's not like anyone does any work there anyway.
  • Makes me think of that Dilbert comic where the punchline has the pointy hair boss watching go goes to the parking lot with binoculars after telling them that work would be closing early due to worsening weather conditions. "This will be the easiest round of layoffs ever".
  • Hourly workers actually do necessary work and can't be spared.
    Management and staff are deadwood and won't be missed.
    If the wheels don't fall off, it's an easy way to tell if a position is redundant.

  • by CoolDiscoRex ( 5227177 ) on Thursday January 12, 2023 @01:05AM (#63201948) Homepage

    Personally, it is not something I have benefitted from having.

    Now, I am entitled to nothing, and typically that is what I take. In the last 18 months, I took one vacation day, and when I leave my job, I will cash out with nothing,

    Itâ(TM)s not like you just get to leave whenever you want. We still have sprints to meet and the time off must be approved before it can be taken. And they still track every hour of PTO and I guarantee they make fancy graphs and hold dick-measuring contests over it. They like to remind us that Washington is a right to work state, so in an economy like this, everyone competes to see who can take the least. I miss my use it or lose it excuse to take vacation days.

    Now I have nothing to lose and therefore nothing to gain.

    Everyone used to have the same amount of vacation. Now 20% of people take 60% of the vacation, those with trust funds and no families to provide for (where unemployment is less scary) get it all, with the rest of us left holding our nutsacks and getting up when the alarm sounds.

    It is very hard to take just the right amount of vacation, so if you have to err, it will surely be to the low side.

    Fuck unlimited vacation with a sharp stick. After 2 years with it, Iâ(TM)ve never had fewer days off, and I also will not get the payout when I leave.

    Not a fan.

  • Unlimited time off means no time off. With no finance PTO on the books it means no need to incentivize it from management.
  • This is *NOT* offering employees "unlimited time off". My company has this, we call it "balanced time away". Instead this is a flexible policy where managers work with their underlings to decide what is an appropriate time off and when.

    Ideally, it could be quite beneficial, for instance, if you work really extra hard for a few weeks to make a delivery, and the manager can recognize that and reward it by agreeing to some additional time off to celebrate and recover. Or if family stress outside of work mou

    • Yeah, going from 'this is what you're entitled to as part of your job' to 'you need to ask for, and justify, taking time off' seems like a terrible idea.
  • ... every employee in Germany already has that. Sick days are not vacation therefore they are not part of the contract. They are regulated by laws not contracts. Companies have to fully pay during the first 6 weeks of any sickness, after that the health insurance company has to pay. This is per illness not per year. Also obviously you cannot be fired for being ill.

    Days off are vacation days, and by law you have to get at least 20 of them per year (for a full time job). Most companies have 30 days, and they

  • Cost savings. That's the only reason they're doing this. It looks like a perk, but should you leave for another job, you don't get the PTO payout.
  • by RealNeoMorpheus ( 6713808 ) on Thursday January 12, 2023 @10:10AM (#63202848)

    My company offers the same thing, but last year, when I took 3 separate vacations totaling 4 weeks in one year period, my manager said that i was taking too much time.

    I reminded her that before the "unlimited" moniker was used, I already had 5 weeks per year due to the time I have been working at the company.

    Havent heard a bit from her.

  • As said by others, unlimited time off effectively means no time off. Your supervisor will approve the occasional vacation, but you try to get more than that and it's a pain and 'conversations.'

Where are the calculations that go with a calculated risk?

Working...