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Online Seminar


July 7, 2012

The U.S. comes in last place when comparing the number of vacation days provided to workers in the top 21 OECD countries. With this in mind, in recent years, the media has dubbed America the “no-vacation nation.”

In most European countries like Germany, the typical worker receives six weeks of paid vacation. The story is very different in the U.S. In addition to a handful of national holidays, the typical American worker gets two or three weeks off out of the entire year for
vacation. The numbers are probably far worse. With faster growing lower paying, part-time and temporary jobs versus higher paying full-time jobs, some government figures show that about 25% of American workers don’t even earn vacation.

As opposed to other advanced countries where labor laws mandate employers provide a minimum amount of paid vacation, the U.S. is the only country that doesn’t require employers to provide any paid time off. Most U.S. companies, however, do provide paid vacation as a way to attract and retain workers.

Because they are not legally mandated to provide paid vacation, American employers take a different viewpoint than their counterparts in other OECD countries. Basically, U.S. employers look at paid vacation not only as a benefit but also the cost to the company and consider such things as wages paid to vacationing employees and the costs of hiring temporary help, paying overtime to employees who fill in, or figuring out how to distribute employees’ workload during their vacation.

Although the amount of vacation provided to the average U.S. worker hasn’t changed much in the last several decades (e.g., two weeks up to the first 5 years of service; three weeks after 5 years of service, etc.), the way vacation is earned and administered has been changing gradually.

The Society for Human Resource Management’s (SHRM) 2011 employee benefits survey summarizes the types of benefits employers are offering their employees. SHRM’s survey shows that US. Employers have continued to evolve their benefits plans to give employees greater responsibility to manage their health care costs, retirement and financial security, as well as leave benefits.

When looking specifically at leave benefits, this typically includes paid and unpaid time away from work. According to SHRM’s analysis of the survey results, paid time off (PTO) plans continue to gain in popularity, while traditional paid vacation plans remain stagnant.

SHRM’s 2011 employee benefits survey found that 17% of organizations offered a PTO program. Many companies have eliminated traditional paid leave and replaced it with a PTO bank. Under PTO plans, employers give employees a certain number of days for
which they can take time off as needed without many of the restrictions of traditional leave policies. Employees accrue days, which are kept in a “bank.” As employees use days; their bank diminishes.

SHRM’s survey results show that 92% of companies provide some form of paid vacation leave to their full-time employees. 48% of respondents offered paid vacation leave through a PTO plan and 44% offered leave through a stand-alone paid vacation plan. 16% percent of employers that provide vacation leave offer a paid vacation cash-out option.

SHRM’s benefits survey also showed that 26% of companies offer paid personal leave separate from paid vacation and paid sick leave plans.In addition, 42% of organization provided paid floating holidays.

In addition to the time off benefits reviewed in the SHRM survey, there’s another type of vacation benefits that’s beginning to grow, especially in legal, accounting and management consultancy groups, and it’s an unlimited vacation program. This type of policy does not allow for vacation to accrue—vacation is granted to employees when they need it. The term “unlimited” is really not accurate because the typical employee in one of these programs is performing in a high demanding role and isn’t able to take as much time off as they want. Unlimited vacation policies do not require the employer to pay out vacation when the employee leaves. An unlimited vacation policy isn’t for every organization. It definitely depends on the workplace culture and it will not be successful in every workplace.   July 2012.

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