Unlimited PTO - Things to Consider

By Rita Keller
Keller Advisors, LLC
February 2019

You are probably aware that CPA firms are now adopting unlimited personal time off (PTO) policies. If you are considering this type of policy for your firm, I want to share some very interesting insights from someone who has experienced unlimited PTO first-hand. He is an audit manager with a firm in the western part of the United States and following are his comments. I hope you find his comments helpful if you are considering adding this benefit.

While there are several success stories from firms using unlimited PTO, each firm must determine if such a policy is a good fit. Sometimes it is very difficult to get certain people to take all of the PTO they are already offered. Lack of vacation is very unhealthy for those people and for the firm.

My current firm does not have unlimited PTO, but I have worked at firms that did. I can't offer a written policy – there really wasn't one – but I can offer some issues to consider.

First, doing away with traceable measures (PTO available/used) demands reliance on other performance measures to determine whether the unlimited policy is being abused. Partners/managers need to pay closer attention to metrics at the individual employee level. Regularly reviewing metrics, such as individual realization, time-to-completion, deadlines met (or missed) and the timing of PTO days taken, becomes essential.

Be sure your practice management system can provide that information before enacting the unlimited policy. Also, the policy assumes that everyone will "do the right thing." Be aware that not everyone will do the right thing and be prepared to take action against those who abuse the system. If you allow unchecked abuse, it will become rampant.

In an unexpected twist, you may need to actually force some people to take PTO. Without the pressure of the old use-or-lose policy, some of those Type A folks will be more inclined, or more pressured, to work instead of taking time off. I'm sorry I can't cite a specific study, but there is some evidence that the unlimited PTO policy actually results in less time away from the office.

Finally, be aware that some states (California and Washington, for example) have passed legislation regarding required sick leave. This is a number that may, by law, require tracking and that might throw a wrench in your unlimited policy. There are typically exceptions if your leave policy is more permissive. And the standard disclaimer: check with your state or your employment law attorney before changing your policy.

"A vacation is what you take when you can no longer take what you've been taking." – Earl Wilson

About the Author: Rita Keller is a nationally known CPA firm management consultant, speaker and author. She is a former shareholder and chief operating officer of a large, successful, regional CPA firm and has over 30 years’ hands-on experience in the management, marketing, technology and administration of a successful firm. Contact her at kelleradvisors@gmail.com. Visit the website at https://ritakeller.com/.