Do unlimited vacation policies actually work?

Unlimited vacation policies do not seem to be working in Canada and the United States, according to a recent report.

In the U.S. and Canada, employees with fixed time off took a median of 17 days of leave in 2025, compared with 16.3 days for those with flexible, or unlimited, vacation.

In Europe, by contrast, employees covered by unlimited time-off policies took an additional four days of leave compared with peers on fixed policies, reports Deel’s founding economist, Lauren Thomas.

“Whether unlimited time off is a boon or a bust depends on where you are,” Thomas writes in Deel’s report, looking at 159,000+ approved and used time-off requests from over 17,500 employees at thousands of companies across the European Economic Area, Switzerland, the U.K., the U.S., Canada, and Mexico in 2025. This includes December time-off requests already approved.

Thomas reports that this pro-flexibility trend held across all European employees regardless of contract type, and regardless of whether leave was recorded in hours or business days.

The pattern also persisted whether she examined vacation alone or vacation combined with sick leave and floating holidays.

To test whether sectoral or company-level differences might explain the regional gap, Thomas reran the analysis using only companies with at least one worker in Europe and one in either Canada or the U.S. The same pattern emerged, suggesting that company composition does not account for the divergence.

“Perhaps in cultures where people are used to taking their time off seriously, they’re more likely to take full advantage of an ‘unlimited’ time-off policy,” she writes.

Offering employees the benefit of unlimited vacation time has proven to boost the feeling of belonging at work, according to a previous report.

Lowest leave usage

The Deel report also identifies North America as the lowest-leave region overall. When Thomas set aside the distinction between fixed and flexible policies and examined total time off by country, North Americans took the least leave among the markets analysed.

Within that group, Canada recorded the lowest leave usage in the sample, despite the U.S. being the only country in the analysis without a statutory requirement for paid vacation. Thomas notes that Canadian employees on Deel’s platform took fewer days off than their American counterparts.

The Canada–U.S. gap remained when the sample was restricted to companies operating in both countries, and after controlling for job group, contract type, company-level effects and relative pay.

To further probe this difference, Thomas ran a panel regression on U.S. and Canadian workers with company fixed effects, using days taken off as the dependent variable. Independent variables included a U.S. worker indicator, broad job group categories, a dummy for non-employer-of-record/professional employer organisation contracts and a “normalised” salary measure to account for pay differences between the two countries.

Time off in Canada vs. U.S.

According to the report, the coefficient for the U.S. worker variable was strongly positive and statistically significant (p < 0.001), indicating that U.S. employees take significantly more time off than Canadians, even after those controls.

Deel’s analysis also references official statistics showing that a higher percentage of American workers have access to paid vacation than Canadians, with 77 per cent of U.S. workers and 73 per cent of Canadian workers covered. While the Canadian federal government and most provinces mandate minimum paid vacation, those rules do not apply to all employees.

The study finds that global companies appear to be associated with higher leave usage than local firms.

One scholar previously claimed that unlimited time off is not an ideal benefit for employees. If anything, it’s a ruse used by employers to make the company more valuable, said Peter Cappelli, an academic at the University of Pennsylvania and director of Wharton’s Center for Human Resources, in talking with Canadian HR Reporter.

Here are some Canadian companies that have offered an unlimited leave benefit, according to reports.

1. Lightspeed Commerce
2. Alida
3. HubSpot (Canada operations)
4. Uberflip
5. LoKnow
6. Purpose
7. TouchBistro
8. Air Canada
9. Google (Canada operations)
10. Crozier
11. Blackbird Interactive