How Great Is Unlimited Vacation Time, Really?

Imagine you could take unlimited time off. Would you luxuriate in four-week holidays? Monthly cruises? Fridays off for the rest of your working life? Probably not, employers bet.

Virgin Group just became one of just a handful of companies (roughly 1 percent) that don’t limit time off for employees at the parent company’s New York and U.K. offices, founder Richard Branson wrote in his new book, The Virgin Way.

“This is an experiment for Virgin Management—the company that manages the Branson’s family investments and the foundation,” spokesman Nick Fox wrote in an e-mail. “We are around 170 people in London and N.Y. The policy started this summer—so early days.” If the test goes well, Virgin will encourage its subsidiaries to follow suit.

Unlimited vacation is a rare benefit, but not unheard of. Zynga, Groupon, Glassdoor, Evernote, VMware, HubSpot,, Motley Fool, Eventbrite, ZocDoc, and SurveyMonkey all have unlimited vacation policies, reported Their expectation is that employees will still be responsible enough to do their work.

Beware the implications of unlimited vacation, however. The glow of trust and togetherness that such policies provide could actually make employees less likely to take time off. Already, some 40 percent of American workers don’t use all their paid vacation days. Even away from the office, employees can still choose to be on their BlackBerrys for 168 hours a week (as the device’s marketing materials point out, to every worker’s distress). Abolishing official vacation days also means you can’t trade unused days for cash, or hoard them for 20 years and take a hard-won paid sabbatical before retiring.

There’s a subtle difference, too, between not tracking vacation days and letting employees take all the days they could dream of. As Daniel Jacobson, Netflix’s vice president for engineering, wrote on his website last year, “Netflix does not have an unlimited vacation policy.” Rather, the company trusts that everyone will get their work done, and it has no interest in monitoring their hours, either at work or away from the office.

Branson wrote that Netflix’s policy inspired him to introduce the same one in the U.K. and the U.S., “where vacation policies can be particularly draconian.”

Draconian indeed. The average private-sector worker in the U.S. gets 16 paid vacation days and holidays, which is paltry compared with, say, Austria, where workers get a legal minimum of 22 paid vacation days and 13 paid holidays each year, according to 24/7 Wall St. Don’t even get me started about maternity leave in the U.S.

It remains to be seen whether, at benevolent companies like Virgin, U.S. workers will boldly expand that two-week annual vacation to two and a half, even when—in theory—nobody is stopping them.

Before it's here, it's on the Bloomberg Terminal.