The Rise of Flexible Time Off for California Employers

Unlimited PTO has long been marketed as the ultimate employee benefit—offering the promise of freedom, flexibility, and work-life balance. While unlimited PTO sounds appealing, in practice, it can lead to employees taking less time off, not more. Without clear guidelines, employees may feel uncertain about how much time is “acceptable” to take, leading to burnout and disengagement.

Additionally, California employers face compliance challenges with unlimited PTO. Certain types of leave such as paid sick leave, bereavement leave, and other legally protected absences must be tracked individually, which can create administrative challenges for your team.

Many companies, especially in California, are shifting away from unlimited time off in favor of a more structured and practical approach: Flexible Time Off (FTO).

FTO policies still provide unlimited personal time off, but with structured tracking for legally required leave and a focus on ensuring employees actually take time to recharge. Employees are required to request personal time, even though it is unlimited. This allows your managers to ensure their department has proper coverage during employee absences in addition to making sure employees are taking enough time off each year.

In addition to the unlimited personal time, employees will also receive California required time off and leave entitlements that are tracked and monitored in alignment with state requirements. For example, California required paid sick leave and bereavement leave. This approach allows you to be compliant with state policy and still provide employees with flexibility.

If your company is considering moving away from unlimited PTO, FTO could be a solution. Reach out to our team for additional guidance on this topic.