Although not all employers are legally obligated to provide paid vacation, it has become a common business practice to do so. In addition, some states now have laws that mandate certain types of paid time off, such as sick time. Regardless, to remain competitive, most employers offer at least some amount and type of paid time off, whether it is with the traditional designations of vacation, sick and personal days, or the catch-all bucket of general paid time off (PTO). We recently wrote about unlimited vacation days.
Similar to previous years’ survey results, 94 percent of employers that participated in this survey offer some type of paid time off benefits. Generally, the percentage of employers offering various types of paid time off and how they manage it has remained fairly consistent the last several years.
This survey was completed by employers in all regions of the United States. The overwhelming majority of survey respondents were from organizations employing fewer than 500 employees, and nearly 60 percent employ fewer than 100 employees.
Paid time off benefits are a valuable offering to employees, and 94 percent of employers offer paid time off to full-time employees. Although PTO banks have become more popular with employers in recent years, it is still more common for employers to offer traditional time off benefits packages, which separate paid vacation, sick time and sometimes personal days. Fifty-five percent of employers currently use these traditional paid time off distinctions, which is a number only slightly lower than in recent years (60 percent in 2012 and 59 percent in 2013, for example).
Although the majority of full-time employees enjoy some type of paid time off benefits, only 31 percent of employers offer paid vacation time to part-time employees. For employees who enjoy paid vacation time, length of service is by far the most popular method for how employers scale vacation time (89 percent). Full-time versus part-time employment is also used by 28 percent of employers when scaling vacation time.
For those employers that provide paid time off with traditional distinctions between vacation time and other types of time off, 78 percent offer paid sick time. The majority of employers (81 percent) do not vary the amount of paid sick time given due to full- or part-time employment.
Fifty percent of employers initially give one to five days of sick time for a full-time employee, with 2 percent offering as many as 16 or more days of sick time. Although the majority (53 percent) of employers allow unused sick time to be carried over to the next year, only 15 percent will pay out for unused sick time upon termination.
Personal time is the least-offered traditional paid time off benefit, with only 43 percent of employers offering personal days. For those that provide personal days, the same number of days is given to all employees and only 11 percent scale the amount of personal time based on length of service.
In order to better manage costs, give employees more flexibility in taking time off, and attract and retain top talent, a growing number of companies are offering employees PTO banks. A PTO plan combines vacation time, sick time and personal days into a single amount of available paid time off that employees can use at their own discretion. Thirty- nine percent of employers offer paid time off in a PTO system.
Of those that offer PTO, 39 percent offer PTO to part-time employees, which is a higher percentage than those that offer the traditional vacation time to part-time employees (31 percent).
As with traditional time-off packages, PTO is most frequently scaled based on length of service (83 percent) and full- or part-time status (24 percent).
Holidays and Other
The majority of employers (93 percent) offer employees paid holidays, with 50 percent offering seven to 10 days of paid holidays. Although most employers offer holiday time, the majority (53 percent) do not offer other types of leave or flextime benefits.
Americans generally value a flexible, family-friendly workplace when choosing a job. Many employers are restructuring their time-off programs in order to meet employee needs and to aid in retention and satisfaction. However, despite an increase in the popularity of PTO programs, the majority of employers still use traditional time off programs, and there are many areas of variance in structuring both types of programs.
Contact GDP Advisors LLC to discuss how these survey results and this benchmarking information can assist you in your future benefit plan strategies.
This survey was conducted in early 2015 through the website provided by GDP Advisors LLC. The survey was anonymous, so responses have not been validated for statistical significance or margin of error.