The Pros and Cons of Offering Unpaid Time Off

When it comes to time off policies, no two businesses seem to do things the same way. Some offer unlimited PTO while others don’t offer anything at all. That’s because every business is run differently, so their policies have to be adjusted accordingly. For instance, industries such as food service and retail have a number of employees who do essentially the same job, so if one needs a shift covered, he or she simply has to get an associate to cover them. However, most office jobs don’t function this way, which is why they typically offer some form of paid time off. But what happens when that PTO bank runs dry well before the reset date? Perhaps the employee got a little overzealous with her PTO early on, or maybe she got sick and had to take PTO that she hadn’t anticipated. Many factors can result in an employee running out of PTO, but the fact of the matter is many supervisors or managers will end up having to confront an employee requesting unpaid time off at some point or another, so it’s a good idea to have a policy in place.


When it comes down to it, allowing unpaid time off will simply save you money. If your employee is opting to take a full day off without getting paid, those funds can be distributed elsewhere. While it’s true that no work is getting done, with paid time off that is still the case. More than saving money, however, is the positive relationships it will build between you and your team. Anything that you can do to show them that you’re willing to go out of your way in order to help them out will create mutual respect between you. Allowing unpaid time off can save you money and help with retention and recruitment purposes. This alone is an excellent reason to consider this option.  


There are a few drawbacks from allowing your employees to take unpaid time off, the primary of which is that it’s easy to take advantage of. When this policy is abused, productivity will drop and things will likely fall through the cracks. Typically, a PTO policy is established to allot the maximum amount of time off to employees that will still maintain a high level of productivity. If employees are taking significantly more than that, your business will no longer be running on all cylinders.

Things to Consider:

At the end of the day, with some careful, easily enforceable regulations, it should be possible to offer an unpaid time off process without decreasing productivity within your business. However, there are a few things you have to keep in mind as you come up with these policies. First and foremost, whatever guidelines you come up with should either allow all of your employees to use unpaid time off or none of them. Playing favorites can cause some major issues between departments, so you want to make sure each department can afford to utilize this kind of policy.

Another option is to have a rule that allows unpaid time off on a case by case basis. If an employee wants to take some unpaid time off, have them jump through a few hoops in order to put their request in, such as writing out a formal request or getting written agreements from their colleagues stating they’re okay with the employee being gone for those specific days. This will deter them from abusing the system while allowing you to use your discretion when making a final decision. This way employees know they have the flexibility to take time off unpaid in the case of an emergency while still forcing them to be more deliberate when allocating their paid time off throughout the year.

Again, it’s important to ensure that whatever you decide to do, you’re doing it for all your employees across the board. If you allow one employee to take unpaid time off under certain conditions, make sure all employees know they have this option available under similar conditions. Your employees will see that you’re willing to work with them when they’re in a bind, and that can do wonders for your retention rates.

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