By Pension and Benefits Editorial Staff
Paid time off (PTO) tends to be a hot workplace topic in December. Employees have questions about which days will be paid holidays, how many vacation days they have left for the year and whether any of their remaining vacation time can be carried over.
A new International Foundation of Employee Benefit Plans report, Employee Benefits Survey 2020, takes a deep dive into all types of workplace benefits—including the most common policies for PTO.
"Even in a not-so-travel-friendly year like 2020, paid vacation time often ranks as one of the most valuable workplace benefits," explained Julie Stich, CEBS, Vice President of Content at the International Foundation. "This year, COVID-19 has brought added attention to workplace paid leave policies as employees' vacation time and holiday celebrations have looked so very different."
Paid holidays. When it comes to paid holidays over the next several weeks, nearly all employers (95%) offer Christmas Day as a paid holiday, and just over half (54%) include Christmas Eve as a paid holiday. For New Year's celebrations, 97 percent of workplaces offer New Year's Day as a paid holiday, and 33 percent offer New Year's Eve
Eight percent of organizations offer their lucky staff the full week between Christmas Day and New Year's Eve as paid holiday time
For flexibility and inclusivity, 53 percent of employers offer paid floating holidays—most commonly one or two days—a perk that allows employees extra time off on a day of their choosing.
Paid vacation policies. December is often a popular time for employees to dip into their vacation time or PTO bank—and even in 2020, it's likely that employees will be taking time off to recharge and celebrate the holidays.
The survey found that 50 percent of employers offer a paid vacation plan, 43 percent offer a PTO bank and three percent offer unlimited vacation time. Since 2016, PTO banks have risen 36 percent in popularity as employers have made the switch from the more traditional vacation/sick time policies to PTO banks.
Most commonly, employers offer ten vacation days after one year of service and increase that amount in increments of five days at service-year milestones: 15 paid vacation days at five years of employment, and 20 vacation days at the ten-year mark. The number of PTO days offered is a little more varied, with ten days at one year of service being the most common option and time varying widely in ongoing years.
To help with recruitment and retention, nearly three-quarters of employers are granting vacation or PTO days immediately to new hires.
Options for unused vacation time. For employees who have not used all their accrued vacation time, 67 percent of employers allow their employees to carry over unused vacation or PTO to future years. Most commonly, employers report allowing employees to carry over just five days (29%); however, under a quarter of employers (16%) allow employees to carry over 40 days or more.
Additionally, 23 percent of employers permit leave donation, which allows employees to donate time off to fellow employees in need. Fifteen percent of employers allow their employees to sell excess time off, and six percent allow employees to purchase additional time off.
The pandemic's impact. Just like everything else, the pandemic has left its mark on workplace vacation policies.
"We have seen COVID-19 cause several different changes to paid time off. Recognizing that employees had few vacation options this year, some employers are allowing workers to roll over more days than usual to 2021 or are paying them for their unused leave time," said Stich. "Other employers are recognizing the importance of time off for mental health and mandating that employees take time off within certain parameters or are giving additional paid leave to be used for any reason."
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