1. “Unlimited” PTO
Design & Implementation Considerations

2. Trends on “Unlimited” PTO
In 2010 only about 1% of tech employers were offering
In % of tech employers are offering
Works best in results-driven companies with process of goals & objectives
Linkedin announced this in Oct 2015 and describes it as part of their “Act like an owner” value. They call it “Discretionary Time Off”.
Other notable companies: Adobe, Akamai, Netflix, Workday, Dropbox
Smaller companies offering as perk to compete with larger, established companies: can-afford.html

4. Challenges with current Accrual-based PTO programs
Doesn’t reflect a company’s culture and values:
“We realized … We should focus on what people get done, not on how many days worked” (Netflix Culture deck)
“The workplace is no longer a place. It's anywhere workers happen to be, and wherever their ideas may take them. And ShoreTel is at the heart of this new reality.” (ShoreTel Careers page)
For exempt employees, doesn’t reflect legal parameters of role:
We don’t track hours worked, why are we tracking hours not-worked?
“Being paid on a “salary basis” means an employee regularly receives a predetermined amount of compensation each pay period on a weekly, or less frequent, basis. The predetermined amount cannot be reduced because of variations in the quality or quantity of the employee’s work. Subject to exceptions listed below, an exempt employee must receive the full salary for any week in which the employee performs any work, regardless of the number of days or hours worked.”
Employees don’t take, or don’t report, or have confusion because of “hybrid” vacations:
I’m on vacation for 4 days and the third day I have to respond to an urgent work that ends up taking two hours to resolve – should I really be “docked” 8 hours for that day?
Accrued balances can equal large $ amount which impacts finances
Ties up money
Creates a “cash out when you leave” reward program vs a utilized benefit

5. Design Considerations

6. Really, it’s that simple!
Old Program
Accrual of Hours
New Program
NO Accrual of Hours

7. Implementing Unlimited PTO
The concept is simple but it’s the implementation and communication that is tricky:
Will you track it?
Will you require approval?
How will it coordinate with your leave policies?
Other ancillary policies: Holidays, Bereavement Leave, Jury Duty
How will managers know how to manage it?
Is your culture ready for it?

8. What do you want to achieve?
ShoreTel Personal R&R: Recover and Recharge
Results-driven – what matters most is people figuring out how to get the results that will achieve our business objectives (i.e. “work smarter, not harder”)
Manage life and work schedules with more flexibility – we’d rather emphasize the importance of personally managing your own work/life situation instead of thinking about number of hours banked and when they must be used
Paid Family Leave: 100% for first 6 weeks
All LOAs approved under FMLA eligible to be paid at 100% for first 6 of the 12 week leave allotment

9. Tracking & Approval Spectrum
No Approvals
No Tracking
No Corporate Tracking
Manager Approval
Full system of Tracking and Approvals

10. Consider your other leave policies
Leave of Absence
Holiday
Bereavement Leave
Jury Duty

11. Managing through the transition
This is a cultural shift in our business and the way we view work and results
PTO accruals set up a perception that Time = Money. It only becomes a reality when someone terms so over time a generous time off policy has turned into a “cash out when I leave” bonus. The goal is to give people time away from work WHILE they are working for us.
Time away from work is not a monetary reward and recognition program. It is a benefit and everyone should be able to utilize it.
While there is no immediate savings to the company, over time it frees up money that can be invested in resources vs being kept as a bonus to people who leave
As a manager, focus instead on the monetary reward and recognition programs we have: Bonus plan, Commission plan, Spot bonuses, Equity, ESPP, 401k match

12. How to Have a Successful Unlimited PTO program
Managers are key: Success of program relies on good relationships and open communication with employees
Establish Expectations
Quarterly and Yearly planning
Coverage for vacations
Shared calendars or OOO requests/ responses
Avoid uncertainty
Focus on Setting Clear Goals
Ensure employees understand your expectations
Goal setting training for managers
Clarity around deliverables and measures of success
Handling Unclear or Long Absence Requests
Ask specific, appropriate questions to clarify the situation – type of absence?
Find out what employee needs or wants
Involve your Dept Exec and HR as appropriate – we are here to help!
Use Your Discretion
Focus on Legitimate Business Reasons (Impact to the Business)
Focus on Employee Performance (Meeting Goals, Productivity, Future Planned Leave)

13. Helping Managers navigate new paradigm
Absence request
For Vacation/Leisure
4 consecutive weeks or less
Manager approves or denies request based on business situation and employee’s role.
More than 4 consecutive weeks
Manager escalates to Dept Exec. Dept Exec approves or denies request
For Other than Vacation
5 consecutive days or less
Manager notifies HR as appropriate. Manager asks employee to come to them if situation changes and more time is needed.
More than 5 consecutive days
Manager consults with HR on determining if Leave of Absence.

14. Handling Existing Balances
Exempt Employees – Multiple options depending on state and company
States where it is not considered “earned” and don’t have to pay balances out upon termination: most extreme option is to just erase balances
States where it is considered “earned”
Pay out full balances
Negotiate with employees to pay out balances at a partial rate
Freeze existing balances and pay upon termination
Stop accruals, leave balances in place for employees to use until they reach zero, then they transition to new unlimited plan
Non-Exempt Employees
Can’t really do away with accruals because of hourly requirements around minimum wage
Can keep non-exempt employees on old system – pros and cons to this
Contracts – Check current employee agreements, especially Executive agreements
Many Exec agreements have specific vacation/PTO clauses determining amount and payout provisions

15. 1 2 3 Summary Consider your company culture and current policies
What problem are you trying to solve with unlimited PTO
How will you implement and communicate it 1 2 3