The Paradox of Unlimited Paid Leave

August 6, 2015 - HRE Daily
Andrew McIlvaine

Paid leave is in the news lots these days: President Obama has just drafted an executive order requiring federal contractors to provide paid leave for medical or health reasons or to care for a sick relative. Employers who fall under the order’s purview would be expected to provide a minimum of about seven days of paid leave per year and to allow the leave to accrue year after year. The executive order — which is expected to go into effect within a couple of months – would not only affect hundreds of thousands of employees, but may have an effect that extends beyond federal contractors: “You can build an expectation that paid sick leave comes with a job,” Elise Gould, a senior economist at the Economic Policy Institute, told the New York Times. “Changes in cultural norms matter.”

Over in Silicon Valley, meanwhile, the cultural norm is plush benefits for the employees of the area’s tech behemoths – and now Netflix has raised the bar: Earlier this week it announced it would offer unlimited paid maternity and paternity leave. Employees can stay out as long as they like to care for their newborn or newly adopted children while still receiving full pay and benefits, said Netflix Chief Talent Officer Tawni Cranz.

Netflix’s announcement makes the generous leave policies offered by Facebook, Google, Accenture and Johnson & Johnson – which offer paid leave for up to four or five months – pale in comparison. However, the longstanding question about unlimited time-off policies – whether they’re for vacation, health reasons or the birth or adoption of a child – is that if you leave it to the discretion of employees as to how much time to take, won’t they actually end up taking less time (or none at all) than if they were given a set amount?

“An unlimited policy sounds great in theory,” writes Jena McGregor, the On Leadership columnist for the Washington Post. “Unless the culture really supports it, however, employees won’t know how to react and may even end up taking off less time than they otherwise would.”

When tech firm Evernote began offering unlimited vacation time to its employees back in 2011, it noticed some employees were actually taking less vacation in order to look better to their bosses, writes MarketWatch’s Catey Hill. The company then actually began paying people $1,000 to actually take a vacation, she writes.

The culprit may be “work martyr syndrome,” Hill writes: Employees – especially those in highly competitive workplaces – are looking for any advantage they can, and by deciding to take less (or even no) time off, they believe they’re looking better in the eyes of their bosses. “You’re trying to show you’re a harder worker,” executive coach Marc Dorio told Hill.

In other words, unless Netflix and other companies offering unlimited time off actually build support for extensive parental or medical leave time into their culture (with leaders setting the example), it will probably be a perk in name only.