Blog - Latest News

Should You Offer Unlimited Vacation PTO?

Unlimited PTO vacation plans are becoming more and more popular these days, but are they really the best option for your business? These plans can do wonders for boosting employee morale and attracting the best candidates for your business, but they can also hurt productivity levels and result in more employee burnout. Let’s take a closer look at PTO, its benefits, and the differences between limited and unlimited PTO vacation plans to get a better idea of what the best option would be for your business.

With progressive technology, game changing financial solutions for employees, and high-level customer service, Beckham Insurance navigates the complicated world of employee benefits for you. Learn More

What Is PTO?

PTO, also known as paid time off, is a benefit program that many companies offer their employees. It allows employees to take personal time away from work to enjoy vacations, recover from illnesses, take care of family emergencies, and much more without losing their paycheck for the day.

PTO generally comes in predetermined amounts and is doled out per employee per year. But not every employee will get the same amount of time off. Part-time employees may average around twenty hours of PTO per year while full-time employees can receive–or exceed–fifty hours. Typically, the amount of PTO a full-time employee can accrue is determined by a set ratio of hours worked to an hour of PTO granted. On average, this ratio is set so that one hour off is granted for every forty hours worked.

Benefits of Offering PTO

Offering PTO to your employees comes with many benefits. It helps your company show your employees that you care about their mental, emotional, and physical health as you grant them more opportunities to maintain a healthy work/life balance. And by doing this, you will undoubtedly increase both employee loyalty to your company and employee productivity when they return from their PTO.

Types of PTO

There are two basic types of PTO that you can offer: limited and unlimited PTO. It’s important to understand the key differences between each before you choose the best option for your company, so let’s take a closer look.


Between the two kinds of PTO, limited is, by far, the more traditional version. It can work very well for some companies, especially those who need to more closely monitor how their employee’s time is being spent in relation to their productivity in the office.

Limited PTO plans grant employees approximately ten days per year to use for sick days, vacation, or whatever else they may need, and this number may be supplemented if State regulations require additional sick days be given to employees. This number is usually very inflexible and may often come with a “use it or lose it” policy that essentially forces employees to use their vacation days by the end of each year.


Compared to limited PTO plans, unlimited ones are relatively new. They allow employees to take as many days off as they want or need per year to cover sick days, doctor’s appointments, vacations, or whatever else may arise without tracking just how much time an employee is taking away from work.

Unlimited plans are much more accommodating of a variety of employee’s lifestyles and can be quite conducive to promoting overall morale by granting workers some much-needed flexibility in their work lives. This is because companies who rely on unlimited PTO plans are promoting output over time spent in the office.

Productivity and Federal Leave Laws

As with anything, the effects of offering either limited or unlimited leave are not confined to one area. Instead, each may have significant impacts on other aspects of your business. Two key areas will include your overall productivity and federally mandated leave laws.

With limited plans, employees are required to be at work for a set number of hours per week in order to receive their paychecks. But with unlimited plans, businesses are more concerned with an employee’s output in a week than how much time they spend in the office.

However, because PTO isn’t monitored with unlimited plans, employees are much more likely to skip their vacation days entirely. With no real push from “use it or lose it plans” or regulations on how many hours they can take off, employees may go one of two ways with an unlimited plan: they make take too few days off leading to dissatisfaction and burnout, or they may take advantage of their unlimited vacation days and rob the company of productivity.

Further, because the idea of unlimited PTO is so new, there may be complications with federally mandated leave laws when employees take too few days.

Employee Benefits Made Easy

We hope you now know more about the different types of ancillary benefits and why to offer them. At Beckham Insurance Group, our knowledgeable and experienced employee benefits representatives are here to help make your benefits administration as easy and stress-free as possible. Contact us today to learn more about how we can help you build a competitive and comprehensive benefits program.

Contact Us