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Unlimited PTO: How One Company Transitioned from an Accrued Plan
How do you make the transition to unlimited PTO when you've been offering an accrued PTO plan? Learn how Vivint Solar did it in this Q&A.
Interview with Jeremy Sabin, Vice President of Human Capital, Vivint Solar
Unlimited PTO is a lucrative benefit that more and more businesses are wanting to offer. But how do you make the transition when you’ve been offering an accrued PTO plan? We asked Jeremy Sabin, VP of Human Capital for Vivint Solar, how his company did it.
How long have you had your unlimited plan in place?
We implemented our unlimited PTO policy in April of 2015 for salaried employees.
Why did you transition from an accrual-based plan to an unlimited PTO plan?
Our culture was already very flexible, and we felt an open PTO policy fit our style. Managers weren’t requiring employees to enter PTO time or approving it. When these employees left, the company would pay out “unused PTO” that had actually been taken already. Overall, it has been a great benefit that is administratively easier and much more cost-effective for us to offer.
How did you handle the transition from an accrual plan to an unlimited PTO plan?
We froze all PTO accruals at the day of transition and then explained that if an employee were to choose to leave the company, they would be paid out for the balance of that accrued PTO when they left.
Did you give employees advanced notice about the implementation of an unlimited PTO policy?
Yes, we gave employees about 3 weeks’ notice of the policy changing.
Have you experienced any abuse from your unlimited PTO policy?
We’ve had very few issues over the years. Really, it comes down to the manager and whether they’ve had open, honest dialogue with employees. If deliverables haven’t been met, the manager sits down with the employee to discuss performance. Managers can always say no when they receive requests for time off if there’s a real need. If they’re concerned that an employee is taking too much time off but is still meeting deliverables, then the manager isn’t giving them enough to do. As long as we have sharp managers, we have no issues with abuse.
Is your unlimited PTO policy available immediately upon hire?
It’s available day one. Some candidates have pre-negotiated trips coming up that they tell us about in advance, and it’s no problem. We explain that they may need to be available if something comes up, but we can usually manage to work around what needs to be done.
Do you have any non-exempt workers that have unlimited PTO?
No, our unlimited benefit is only available to exempt employees. Timekeeping laws in several key states pose challenges to opening this up to hourly employees.
What advice to you have for companies considering an unlimited PTO policy?
Train your managers well. If you have a manager that is very inexperienced, it could create problems rolling out a policy like this. Sometimes candidates can be skeptical with this policy; they may think you provide “unlimited PTO” so that you can say no whenever you want. Recruiters have to be well trained to explain the policy and how it works, and you have to build a culture where employees feel like they CAN take time. If it feels like they haven’t taken enough time off, managers should encourage them to take a vacation. We’ve actually noticed that, overall, employees have taken less time off on this policy than on our accrued policy. Give employees time to plan, consider all the possible “what-ifs,” and train your managers.
Any other thoughts about businesses considering an unlimited PTO policy?
On a general basis, that which we fear the most for worst-case scenarios hardly ever comes to pass. Don’t be afraid to take risks because of the potential consequences. Expect the worst, plan for it to happen. But being prepared will make you pleasantly surprised when the worst doesn’t happen.
For more information or details on how to transition your company from an accrued-based plan to an unlimited PTO policy, please see Unlimited PTO: Right for Small Businesses? or contact your certified HR expert.