In a landmark decision, Microsoft tweaked its vacation policy to give U.S.-based salaried workers unlimited time off.

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

Employees will still have corporate holidays, and days off for reasons like illness and jury duty.

“Beginning January 16, 2023, Microsoft is modernising 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 have dramatically changed and DTO aligns with more flexible ways of working.”

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.”

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.

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.