Story highlights

A no-limit vacation policy can help companies boost morale

Start-ups and tech firms are more likely to have a limitless vacation policy

Managers may find it disruptive for the workflow, especially in retail

CNN  — 

It almost sounds too good to be true: unlimited time off.

While most employees have a set number of days off, and carefully apportion them over the course of the year, some workers have no limit on how many days off they may take.

“We have a no-policy vacation policy,” said Matthew Trogdon at The Motley Fool, a financial services company in Alexandria, Virginia. “We just want you to get your work done, however you’re going to do it best.”

The freedom can take some getting used to.

“I think everybody goes through a shock period at first,” he said. “But people settle in pretty quickly.”

If no one’s counting, do employees actually take more time off? Trogdon says he has no idea … because no one’s counting.

Netflix, which also has no limit, has no worries that people will slack off in the absence of a firm vacation policy.

“There is also no clothing policy at Netflix, but no one comes to work naked,” says the company handbook. “Lesson: you don’t need policies for everything.”

According to benefits expert Bruce Elliott at the Society for Human Resource Management, an unlimited vacation policy can help a firm with recruiting, boost employee morale, and even increase productivity.

“Studies have shown that employees are more productive in more-flexible working environments,” he said. “They’re more engaged, and turnover is lower.”

Elliott estimates that employees with no limits on vacation take about three or four weeks off per year. Only around 1% of companies have limitless vacation, he says, but he sees it growing, especially among start-ups and tech firms – such as Evernote, HubSpot, and NerdWallet – which are looking for self-starters and people with a certain kind of attitude toward work.

But there can be some pitfalls.

Managers could find absences disruptive for the workflow, especially for retail and service jobs, in which the schedule depends on the customers.

At the Capitol Lounge in D.C., server/bartender Scott Haller said the restaurant will be open on Labor Day, to cater to all the people who want to go out on their day off. “If everybody working here wanted to go to the beach on Labor Day, it would be impossible,” he said. “If you take too much time off, they’ll start scheduling other people in your place.”

Another potential problem: when workers quit or get fired, they would no longer be owed any payout for unused vacation days.

Also, employees who abuse the privilege, who take too many days off and fail to complete their work, could risk losing their jobs. Or, on the flip side of that, workers could be so anxious in the absence of firm guidelines that they take off too little time.

At marketing software company HubSpot in Boston, the amount of vacation has no ceiling, but it does have a floor.

“People must take a minimum of two weeks,” said spokeswoman Katie Burke. But ironically, any enforcement of that minimum has to rely on self-policing, because the company is not keeping track.

The Motley Fool has a more extreme remedy: a monthly lottery, with the winner required to take a two-week vacation. In June, the winner was Trogdon.

“The only rules are, they have to be taken within 30 days,” he said, “and you can’t have any contact with the office.”