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Microsoft is changing its vacation policy to give U.S.-based salaried workers unlimited time off.

The new policy, which goes into effect Jan. 16, is described by the company as “Discretionary Time Off.”

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

The new policy is in addition to corporate holidays, leaves of absence, and time off for sick days, mental health, jury duty, or bereavement, The Verge reported.

Many companies offer variations of unlimited vacation, including Netflix, General Electric, and Microsoft-owned LinkedIn, which rolled out its own “discretionary” vacation policy in 2015.

Software giant Autodesk also describes its vacation policy as “Discretionary Time Off.”

“It’s your choice about when to use your time off, but you still need to get your manager’s approval — as far in advance as possible — before taking DTO,” Autodesk notes. “Your manager will consider the needs of your business unit, your work performance, and your ability to meet your work commitments and duties.”

Unlimited vacation can help attract top talent and reduce the cost of accrued vacation time. But the policy can also lead to employees taking less vacation due to peer pressure and expectations around “acceptable” time off, BBC reported earlier this year.

Microsoft has implemented a hybrid workplace model, offering flexibility for remote work, but it expects most employees to be in the office at least 50% of the time.

Follow-up: Why Microsoft’s new unlimited vacation policy could be problematic for employees

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