03 Sep Days Off: What Should Companies Do?
According to the Bureau of Labor Statistics, more than one-third of private businesses extend between 10 and 14 days of paid vacation to employees after said employees have reached their one-year mark of employment. Then, after 10 years of employment, the average number of paid time-off (PTO) days typically increases to between 15 and 19 days per employee.
What is the highest number of vacation days?
In most instances, the maximum vacation days that employers offer is approximately 20. Though some businesses permit employees to take more than 20 days of vacation every year, most companies offer 20 days of vacation as appreciation for 20 years of employment.
What about personal days?
Just like vacation days, the number of personal days that employees can take may differ from one business to the next. That said, in most cases, businesses offer employees either one or two days per year.
How about PTO?
PTO refers to vacation days, holidays, sick days, maternity leave and jury duty, all of which refer to days that are paid. In essence, PTO broadly covers any paid absence from work, whether that is vacation, illness or personal days. When you view it in that way, most employees receive around 12 days of paid leave, which is about two weeks on average.
For your business in particular, you might adjust your vacation and PTO policies according to the specifics of your industry. Similarly, you might need to implement your policies based on regulations in your state of operation.
Just make sure your PTO policy is attractive. That way, you can appeal to high-quality, talented and suitable prospects. Studies have shown that paid leave assists companies in recruiting, hiring and retaining employees.
Are unlimited PTO and vacation days an option?
There are businesses out there that offer unlimited PTO. In fact, the modern workforce often receives a general PTO bank, especially in the aftermath of the pandemic. With this type of dynamic, employees are able to take advantage of time off as needed no matter the reason, which results in favorably flexible work lives for those on the receiving end of unlimited PTO.
What should be the bare minimum?
Consider a 10-day leave option as a crucial part of your benefits package. This can distinguish it from the rest.
From there, think about extending 10 days of annual paid vacation per employee. On top of that, you can offer the possibility of adjusting this 10-day proposal based on the presence of — or lack of — tenure or based on a certain number of hours worked. In most cases, this will equate to two full weeks for the average employee in addition to eight days of sick leave.
For added flexibility, an alternative approach could be providing 20 days of PTO per year in addition to official holidays. A company’s appeal often hinges on its ability to offer a PTO policy that is not restrictive, so keep this in mind.
Note that approximately 55% of PTO remains untapped, meaning the opportunity to take advantage of PTO is not that advantageous to employees after all. Interestingly, more men tend to utilize allocated days than do women, who tend to lean toward the utilization of sick time more than anything.
Holidays are designated for reserved days throughout the year, whether on a national or state level. In most instances, holidays refer more so to dates that are universally observed as nonworking days. In contrast, vacation days afford employees the option to deviate from their usual work schedule and take time off when it would otherwise not be offered to them as such.
Regarding unpaid leave, its status at the end of the year — as well as the carryover of vacation days into the subsequent year — are important considerations to make. While some states implement a use-it-or-lose-it policy, others require employers to compensate full-time staff for any vacation days that employees accrue but do not use.
That said, it’s important to note that both unused PTO and vacation time might be details an employee can request payout for upon departing from the company. This is certainly contingent upon state regulations, but laws aside, unused sick time is typically exempt from compensation when employees quit their jobs.
All these possibilities explain why business owners must clearly define and relay the company’s vacation policy.
So, what kind of time-off plan works best for your company and your employees? After considering what type of dynamic will best suit the nature of your business, you can compare your ideas to what other businesses in your field offer.
Original content by © IndustryNewsletters. All Rights Reserved. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.