Microsoft is offering workers unlimited time off - but not everyone is happy

Microsoft ZeniMax Labor Union (Copyright 2021 The Associated Press. All rights reserved)
Microsoft ZeniMax Labor Union (Copyright 2021 The Associated Press. All rights reserved)

Microsoft is offering all US employees unlimited time off in an attempt to “modernise” its vacation policy, according to an internal memo.

Workers at the tech giant were previously allowed four weeks of paid time off each year, plus an extra week every sixth year. The new Discretionary Time Off (DTO) system will mean employees will no longer need to log or accrue days for holidays.

Microsoft’s Chief People Officer Kathleen Hogan said the firm will introduce the changes from 16 January, though only salaried workers will benefit from the updated policy.

“How, when, and where we do our jobs has dramatically changed,” Ms Hogan wrote in the memo, which was first reported by The Verge.

“And as we’ve transformed, modernising our vacation policy to a more flexible model was a natural next step.”

Not all Microsoft employees appeared enthusiastic about the new approach, with Microsoft recruiter Katherine Dumanoir warning of the downfalls of such a method in a post to LinkedIn.

“I have personally never been a big fan of unlimited PTO [paid time off], but we will see how this goes,” she wrote.

“Only reason I am a skeptic of unlimited PTO is because there’s no protection for the employee. It’s at the discretion of leadership and there are no pay outs for days not used in the case of a layoff.”

Microsoft said the new holiday rules would not apply to hourly workers in the US due to federal and state wage laws that made it difficult to implement. Those outside of the US will retain their current vacation benefits.

The company will also continue to offer all employees 10 corporate holidays, leaves of absence, sick and mental health time off, according to the memo.

Microsoft follows other US tech companies in introducing DTO, including Netflix, Oracle and Salesforce. Ratings on job comparison sites typically put a company’s vacation policy as the second most benefit besides healthcare when ranked by employees.