Flexible Time Off: Three big myths
I can’t think of a time off topic that gets more bad press than Flexible Time Off. There are oft-repeated stories of early adopters of FTO that ended up going back to traditional accrued PTO. There’s the common belief — rarely grounded in actual experience — that FTO really means “no PTO.” And there are some pundits who go so far as to call FTO a scam that benefits employers financially and hurts employees.
The goal of this post is not to sell you on FTO, but to separate myth from reality — and the reality is that FTO is a tool employers should consider seeing if it’s right for their organization. For many, it won’t be. But in organizations where the boundaries between work and personal time have blurred, and many employees work outside traditional hours — including during vacations — a traditional accrual-based approach may not align with how work gets done. If that sounds like your organization, don’t let the myths about FTO stop you from rethinking your approach to time off.
Myth 1: No one is doing Flexible Time Off anymore
A decade or so ago, when flexible or “unlimited” PTO was first introduced, it was seen as experimental — something limited to certain industries, select employers, or executive and exempt populations. Those days are gone. FTO has moved into the mainstream, with nearly one in three employers (32%) now offering it to at least some employees, more than double the percentage back in 2015. What used to be reserved for executives is increasingly extended broadly across employee groups, reflecting that the concept is no longer fringe, controversial, or new.
This growth is driven by practical realities as well as the benefit’s popularity. FTO can reduce administrative complexity and financial liability tied to tracking and paying out large, accrued balances at termination. It also reflects the reality that many employees contribute outside set hours, which can make tracking when people are or are not taking time off disconnected from reality. In competitive talent markets, FTO is used as a differentiator — often targeted to employee segments where competition for talent is the greatest.
Myth 2: Employees take way less PTO after Flexible Time Off is implemented
A persistent concern is that employees won’t actually use time off once the structure of accrued hours disappears, either because expectations are unclear or because employees fear being perceived as less committed. While underuse can happen in poorly managed environments, the data does not support the idea that FTO automatically causes employees to take dramatically less time off.
Among employers who have adopted FTO, 78% report employees take about the same amount of time off as under traditional plans. Another 8% say employees take more, and 14% say employees take less. That pattern challenges two common misconceptions at once: that FTO leads to widespread abuse, and that it inevitably leads to employees taking far less time away from work.
Where organizations do see underuse or inconsistent usage, the root cause is often not the policy itself but the surrounding norms and management practices. Clear expectations, manager support, and a performance-driven culture that encourages appropriate time away from work all help employees feel comfortable taking PTO without worrying about stigma or uneven treatment.
Myth 3: Flexible Time Off is good for employers and bad for employees
FTO can absolutely be designed in ways that frustrate employees, especially if expectations are unclear, manager practices are inconsistent, or employees feel pressure to “prove” they’re working by not taking time away. But those risks are not inherent to FTO — they are design and governance problems. When implemented thoughtfully, FTO can benefit both employers and employees.
For employers, FTO can reduce accrued PTO liabilities and administrative burden. Mercer data shows that at transition, many employers forfeit accrued PTO balances (approximately 43%), while others pay out balances or freeze them with a use-by date. Those decisions can be financially meaningful and can help avoid inflated liabilities, particularly among populations that historically may not track time consistently. FTO can also improve an organization’s ability to accommodate a workforce with varied needs and work styles, supporting attraction, retention, and engagement.
For employees, the upside is autonomy and the ability to take time off in a way that better matches real life — without feeling constrained by accrual math. The key is ensuring employees experience the flexibility in practice, not just in name. That requires guidelines that set cultural expectations and support fairness, along with manager training so decisions are consistent and employees don’t experience favoritism or inequity.
There are also legitimate operational and compliance considerations that must be addressed. Some roles and industries require more predictability to maintain staffing and service levels, meaning a more structured approach may be necessary in certain settings.
Employers also need to coordinate FTO with other leave policies to ensure all the leave policy pieces fit together. One key consideration is whether or not paid sick leave is or is not included in the FTO policy. In a recent Mercer survey, 45% of the organizations surveyed track paid sick leave separately from FTO, while others include it but track state-mandated sick leave separately. Getting these integrations right helps protect employees’ access to leave while keeping the program administratively workable and meeting paid sick leave state and local compliance requirements.
FTO is more than a trend — it’s a strategic response to how work and expectations have changed. Organizations that pair flexibility with clarity, manager capability, and thoughtful design can create programs that support employee well-being while also meeting business needs in a competitive talent market. As the myths of FTO continue to be busted, I expect to see FTO prevalence continue to grow.
