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Microsoft reportedly gives US workers unlimited time off

The change is set to begin on 16 January and follows other companies like Oracle and Salesforce

Microsoft is giving workers in the US unlimited time off, joining other tech giants in introducing the rare employee benefit.

Employees were made aware of the change to their paid time off when Kathleen Hogan, the tech giant’s chief people officer, sent them a memo on 11 January, according to The Verge. The change will apply to US employees, although it won’t apply to hourly workers.

The change, dubbed 'Discretionary Time Off' by the tech giant, will begin on 16 January and will also apply to new employees.

Additionally, the company will give employees ten corporate holidays, as well as sick leave, leaves of absence, and mental health time off.

Employees who haven’t used up all their holiday days will get a one-time payment in April.

“How, when, and where we do our jobs has dramatically changed,” said Hogan. “And as we’ve transformed, modernising our vacation policy to a more flexible model was a natural next step.”

It’s unclear whether this change will be made available to employees outside of the US in the future, although the tech giant said staff outside the US will keep their current holiday benefits due to different laws in other countries. It also said federal and state wage and hour laws make it difficult to offer unlimited time off to hourly workers.

“Beginning January 16, 2023, Microsoft is modernising our vacation policy to a more flexible model and transitioning to Discretionary Time Off (DTO)," a Microsoft spokesperson told IT Pro. "How, when, and where employees do their jobs has dramatically changed and DTO aligns with more flexible ways of working.”

The spokesperson added that the initiative doesn't apply to the UK.

Microsoft joins companies like Oracle, LinkedIn, and Salesforce which also offer unlimited time off for staff. In May 2022, Microsoft also almost doubled its budget for employee salary increases. The company was aiming to retain staff and help employees cope with inflation. However, the move was only set to affect early to mid-career workers.

"Organisations who have instituted unlimited PTO approaches have found that organisational fairness and perceptions of trust in the organisation can be negatively impacted," Augustus Vickery, senior principal at Gartner HR Practice told IT Pro. "Employees know that PTO cannot really be ‘unlimited’, and the ability to take PTO is instead dependent on a range of factors to do with their job, workload, team culture and manager.

"Removing the set allowance of PTO days can result in employees taking less time off overall and increase discrepancies between employees in the PTO they are able to take," said Vickery.

50% of workers in the US would prefer to have unlimited time off compared to earning a higher salary, according to a survey of 2,000 workers by Fortune. In March 2022, only 9% of workers in the US had access to the employee benefit.

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In 2019, Hiring Lab found that job postings advertising unlimited holiday time rose 178% between 2015 to 2019, from 450 postings per million to 1,300 postings per million. Tech roles, like data scientists or software engineers, are also six-to-eight times more likely to be offered this benefit than other jobs.

Nearly three in four employees feel positive about unlimited paid time off, with 82.1% of those who already enjoyed the benefits feeling positive about it, according to research from Joblist from March 2022.

However, in the US, in the year before the research was published, employees took an average of 11 paid days off work, one more day than what’s considered to be the minimum vacation time of two weeks in the country.

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