Unlimited vacation can save companies billions. But is it a bad deal for workers?

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The generous-sounding policies often exacerbate reasons why American workers put off taking days off in the first place.

Amid the tightest job market in two decades, a small but growing number of U.S. companies are offering their workers a deal seemingly too good to be true: unlimited vacation.

But a growing body of research indicates that the all-you-can-take vacation model is a much better deal for companies than it is for workers. The U.S. is the only industrialized nation that doesn't legally require paid time off for workers. That means that American companies that offer their employees vacation days, do so as a business expense, alongside workers' salaries, health care costs and coffee for the office.

Under"unlimited" or"flexible" vacation policies, however, workers no longer have to earn a fixed amount of time off, which means they are not entitled to compensation for any unused vacation days. Companies that switch to flexible vacation policies therefore erase billions of liabilities from their budget.

 

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