Unlimited Time Off at the New Year: Why It’s Still Controversial in US Tech (and What “Unlimited” Really Means in 2026)

The first week of January is when “unlimited time off” becomes real.

All year, unlimited PTO sits on a careers page like a promise: trust, flexibility, modern work. Then the calendar flips, people look at their year ahead, and the same questions show up in every US tech company—sometimes in leadership meetings, sometimes in private Slack messages, sometimes in quiet resentment:

Are we actually allowed to take time off? How much is “normal”? Does it hurt promotion odds? Is this benefit generous… or is it a liability trick?

Those questions aren’t cynical. They’re rational.

Unlimited PTO is one of the most emotionally loaded benefits in tech because it lives at the intersection of culture, performance, and fairness. When it works, it feels like adulthood: you manage your work, you take care of your life, and nobody counts your days like they’re ration coupons. When it fails, it becomes a social guessing game where the safest move is to take less time off than you need.

And in 2026, that tension is sharper, not softer. The broader market has been sending signals that the “post-pandemic perk era” is changing. Indeed’s data showed unlimited PTO in US job postings dropping to 2.9% as of June 2025, down from 8.8% in March 2022. That doesn’t mean unlimited PTO is disappearing everywhere—but it does mean candidates and employees have gotten more skeptical. The benefit has to earn trust now.

Why the New Year exposes the cracks

Unlimited PTO is easiest to sell and hardest to operate.

In December, people are sprinting to close projects, take a few holiday days, and disappear. In January, people are planning weddings, school breaks, surgeries, family caregiving, big trips, and the kind of recovery time nobody schedules when they’re overwhelmed.

That’s why January is when “unlimited” gets tested. Not with one day off. With real time off.

It’s also when companies quietly reset expectations. Budgets finalize. Performance narratives restart. New leaders arrive. Roadmaps get aggressive. A policy that depends on trust and psychological safety will either strengthen in that environment—or become performative.

The uncomfortable truth: unlimited PTO often comes with invisible limits

The policy says “take what you need.” The culture often says “don’t be the person who takes too much.”

This isn’t just anecdotal. Multiple reports and surveys have noted that usage under unlimited policies is frequently not dramatically higher than traditional plans, and sometimes lower. SHRM reported employees with unlimited PTO taking about 16 days on average, versus 14 days under set-allotment plans. That’s a real increase, but it’s not the “infinite vacation” fantasy the phrase implies.

The gap between the marketing and the lived reality is where distrust grows. When employees don’t know what’s acceptable, many choose the safest option: less.

US tech workers also carry a fresh memory of recent volatility—layoffs, reorganizations, return-to-office mandates, tighter performance management. In that atmosphere, a benefit that relies on “just trust us” can feel fragile.

Why some companies are backing away from unlimited PTO

In the last couple of years, the public conversation shifted from “unlimited PTO is progressive” to “unlimited PTO is complicated.” Even news and business outlets have highlighted how the benefit can create ambiguity and guilt, and how it can advantage employers by reducing accrued PTO liabilities.

Some companies have reversed course explicitly. For example, Bolt’s leadership publicly ended unlimited PTO and replaced it with a more structured approach, framing unlimited as “broken” in their environment.

This isn’t proof that unlimited PTO is inherently bad. It’s proof that policy design can’t compensate for cultural reality. If your company runs on heroics, constant urgency, and status signaling through overwork, unlimited PTO becomes a perk that exists mostly on paper.

The CFO question: is unlimited PTO an accounting move?

This is where the topic gets sensitive, because two things can be true at once:

Unlimited PTO can be offered in good faith as a trust-based benefit.

Unlimited PTO can also reduce financial liability compared to accrued vacation systems, depending on how a company’s policies and state laws treat payout.

That second point matters a lot in the US because vacation payout rules vary, and some states treat accrued vacation as earned wages. California is the most famous example: when vacation is earned under a policy, it can’t be forfeited and must be paid out at termination.

Unlimited PTO is often positioned as “no accrual,” which can reduce payout obligations—but regulators and courts can scrutinize policies that are labeled “unlimited” while functioning like limited vacation in practice. (This is an area where HR and legal counsel should be closely aligned; the details matter.)

For CEOs and HR leaders, the reputational risk is as important as the legal risk. If employees believe the benefit exists mainly to avoid payout, it stops being a retention lever and starts being a trust tax.

The compliance trap: “unlimited PTO” doesn’t erase state paid leave laws

Another reason unlimited PTO gets messy in the US is that “time off” isn’t one thing.

Vacation is one thing. Sick leave is another. Family leave is another. And state and local requirements are expanding, even though there is no general federal requirement for paid sick leave.

A growing number of states (and many cities) require paid sick leave, with specific accrual, carryover, notice, and documentation rules. California, for instance, increased its statewide paid sick leave minimum to 40 hours or five days starting January 1, 2024.

Unlimited PTO can coexist with these laws, but it doesn’t automatically satisfy them. If a company lumps everything into an “unlimited” bucket without tracking in a way that meets local requirements, it can create compliance exposure—especially for multi-state employers.

This is one of the reasons US-based HR teams often end up with a hybrid reality: “unlimited” vacation for flexibility, plus defined and trackable sick leave frameworks where required.

The employee experience problem: ambiguity punishes cautious people

Unlimited PTO doesn’t affect everyone equally.

In many tech cultures, the people who take the least time off are not the least committed—they’re often the most conscientious. They’re the ones who don’t want to create extra work for their team, don’t want to appear less ambitious, and don’t want to violate an unwritten rule they can’t see.

Ambiguity becomes a bias amplifier. Not in the usual legal sense of protected classes, but in a very human way: extroverts ask; cautious people guess. Tenured employees push boundaries; new hires stay quiet. People with strong internal political capital take more; people who already feel “on the edge” take less.

At the New Year start, when teams set their pace for the year, these patterns lock in early. If Q1 becomes a grind, unlimited PTO becomes increasingly theoretical by Q2.

The manager experience problem: “approved as long as…” is still management

Unlimited PTO is sometimes sold as removing bureaucracy. In reality, it changes the type of management required.

Instead of managing a bank of days, managers manage coverage, delivery risk, and perceived fairness. If that management is inconsistent across teams, the policy becomes a lottery. Candidates and employees quickly learn which teams “really mean it” and which teams don’t.

This is why unlimited PTO can accidentally become a brand risk for CEOs: employees don’t describe it as “our policy.” They describe it as “my manager.”

What actually makes unlimited PTO feel unlimited

The best versions of unlimited PTO have something in common: they are not vague. They are culturally explicit.

That might sound paradoxical, but it’s the difference between “you’re an adult, figure it out” and “you’re an adult, and here’s how adults coordinate so everyone can rest without chaos.”

When unlimited PTO works, it’s usually because the company has clarity in three areas:

First, the company has a stable definition of high performance.
Not “always online,” not “fast replies,” not “never take time off,” but measurable outcomes and ownership. When performance is defined by outcomes, time off becomes less threatening. When performance is defined by presence, time off becomes risky.

Second, the company has a shared norm around what “healthy” usage looks like.
Not a cap, but a cultural baseline. When employees can point to leadership behavior and peer norms, they stop guessing.

Third, planning and coverage are treated as an operational practice, not an individual burden.
In high-trust environments, taking time off doesn’t feel like asking permission to have a life. It feels like coordinating, the same way you coordinate an on-call schedule or a product launch.

None of this requires turning PTO into a spreadsheet contest. It requires acknowledging that unlimited PTO is not a perk you “offer.” It’s a behavior you model and protect.

The New Year question every CEO and HR leader should be ready to answer

Employees may not ask directly, but they will decide how to behave based on what they believe the answer is:

“When deadlines collide with time off, who wins here?”

If the answer is always deadlines, unlimited PTO becomes a recruiting line with little value. If the answer is “time off always wins,” you may create delivery risk in critical functions unless the organization has strong planning habits. The sustainable answer usually sounds like reality: sometimes deadlines matter, sometimes life matters, and the company has a mature way to handle the conflict without punishing people for being human.

This is why unlimited PTO is not primarily a benefits decision. It’s an operating model decision.

A note on “unlimited PTO” and trust in 2026

Given the continued skepticism in the market—and the measurable decline of unlimited PTO in job postings since 2022—companies that keep or introduce the benefit in 2026 should assume they’re being evaluated on credibility, not novelty.

Tech professionals, CEOs, and HR leaders are now fluent in the criticism: “It’s just to avoid paying out unused vacation,” “It’s a trap,” “It only works if you’re already senior.” The only way to counter that narrative is through consistent internal reality, not better branding.

Closing: January is when your policy turns into your reputation

Unlimited PTO is one of those benefits that looks simple from the outside and behaves like culture on the inside.

If you’re publishing this in the first week of January 2026, you’re catching your audience at the exact moment they’re deciding what kind of year it will be: a year where rest is normal and planned, or a year where rest is something you “earn” only after burning out.

In US tech, talent doesn’t just choose comp and title anymore. They choose operating environments. Unlimited PTO can signal trust and maturity—or it can signal ambiguity and hidden expectations. The difference isn’t the policy language. It’s whether the company can make “unlimited” feel safe, fair, and real.

Disclaimer: This article is general information, not legal advice. US leave requirements vary by state and locality, and policy design should be reviewed with qualified counsel.