Microsoft Says It Will Start Offering US Employees ‘Unlimited’ Time Off

The Microsoft logo at the Microsoft Annual Shareholders Meeting in Bellevue, Wash., on Nov. 30, 2016. (Jason Redmond/AFP via Getty Images)

Starting next week, Microsoft’s current vacation policy will change to an unlimited one, meaning all salaried employees in the United States can take time off as needed and also will no longer need to wait and accrue holiday anymore.

The new policy, which goes into effect on Jan. 16, is described by the world’s biggest software company as “Discretionary Time Off.”

“How, when, and where we do our jobs has dramatically changed,” Kathleen Hogan, the company’s chief people officer, said in an internal memo viewed by The Verge. “And as we’ve transformed, modernizing our vacation policy to a more flexible model was a natural next step.”

In addition to this new so-called “unlimited time off” policy, Microsoft also will offer 10 corporate holidays, leaves of absence, time off for sick or mental health, jury duty, or bereavement, according to the network, citing Hogan’s memo.

In case an employee still has an unused vacation balance, this day—or days—will be compensated in a one-time payout in April.

Microsoft said the new policy will not be applied to hourly workers, citing federal and state wage and hour laws as the reason for this.

Employees working in other parts of the world also won’t be able to enjoy this flexibility due to different laws and regulations in countries outside the United States, making it difficult to enforce the policy.

The international technology company had around 122,000 full-time employees nationwide in the fiscal year 2022, and approximately 221,000 people in full-time positions worldwide.

Microsoft is not the first big tech company to offer unlimited time off to its workers. Salesforce, Microsoft-owned LinkedIn, Oracle, and Netflix have each offered workers a similar policy in the past, The Verge reported.

Netflix, one of the first notable U.S. companies to take on an unlimited vacation policy, began offering this vacation system to its employees in 2010. Netflix calls the policy, “No Vacation Policy,” which in essence places an employee in charge of deciding for themselves when to work and when to take a break.

Due to staff shortages, many tech companies compete to keep and find talent by offering extra benefits as a key selling point. Netflix and Microsoft, among others, are certainly among the tech firms that have family-friendly policies.

For years, Netflix has encouraged employee freedom by offering an unlimited vacation policy while also allowing them to bring pets to work. The company also offers one paid year of maternity and paternity leave to new parents.

Although the policy has become more common in recent years, it is still quite rare. According to a 2021 survey, about 4 percent of U.S. companies offer it. The survey also found that 51 percent of organizations use traditional paid leave plans, while 41 percent offer paid time off, or “PTO.”

A report published on the BBC in May 2022 found that although the policy could allow overworked staff to rest and improve their mental health and overall work/life balance by taking time off when needed, it also led to some workers taking less holiday due to pressure from their peers because of an “unacceptable” amount of holidays.

There are also a number of companies that initially adopted the policy, but terminated it again later because employees often ended up taking less time off than they did with a fixed policy, according to the report.

One such company is Unknown, a London-based recruitment agency, which went viral on LinkedIn after the firm’s CEO announced that it is scrapping its unlimited leave policy after workers felt “guilty” and never took time off. The company instead transitioned to a policy allowing employees to take 32 paid days off, universally across the ranks.

From NTD News