Traditional and PTO Bank Plans Still Dominate the Paid-Leave Landscape

'Unlimited' plans are trailing far behind

Stephen Miller, CEBS By Stephen Miller, CEBS May 14, 2021
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Traditional and PTO Bank Plans Still Dominate the Paid-Leave Landscape

Traditional paid leave plans, with separately accrued sick days, vacation time and other eligible days off, remain the most common type of paid time off (PTO) plan in the U.S., new research shows.

According to online compliance advisory firm XpertHR's Paid Leave Survey 2021 (registration required), the most common leave plans offered by U.S. employers are:

  • Traditional paid leave plans (51 percent of responding employers, up from 49 percent in 2020).
  • PTO bank plans in which all or most leave is combined together (41 percent, down from 44 percent).
  • Unlimited paid leave plans, where all or most leave has no predetermined limits (4 percent; unlimited plans were first tracked in the 2021 survey).

The 2021 survey was conducted from Feb. 23 to March 19, with responses from 639 U.S. employers that together employ more than 2 million workers.

"Despite the buzz surrounding unlimited leave plans in the HR and benefits space in recent years, traditional and PTO [bank] plans maintain their supremacy in the world of paid leave," said Andrew Hellwege, surveys editor at XpertHR.

Among employers with a traditional leave plan, the top-four most common categories of leave were paid vacation (98 percent), paid sick leave (91 percent), paid bereavement leave (83 percent) and paid leave for jury duty (75 percent).

The survey excluded companywide paid holidays as paid leave.

Julie Stich, CEBS, vice president of content at the nonprofit International Foundation of Employee Benefit Plans (IFEBP), said the COVID-19 pandemic has caused several different changes to paid time off.

Recognizing that employees had few vacation options last year, she said, some employers allowed workers to roll over more days than usual to 2021 or paid them for their unused leave time. "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," Stich said.

[Related SHRM Express Request: Encouraging Employees to Take Time Off]

Keeping Sick Days Separate

Some larger employers not only have increased their number of sick days to adhere to new federal requirements but also have started tracking days more diligently to better understand how employees are using them, Lisa Frydenlund, knowledge advisor at the Society for Human Resource Management (SHRM), told The Wall Street Journal in March.

In addition, some companies "are once again separating sick days into their own category to track them more thoroughly, a policy that was decreasing for the past decade," Frydenlund said. "I'm seeing more of a shift over the last year and the need to possibly go back to a specific sick bank" because companies want to make sure they are adhering to state and federal policies, she added.


After Hoarding PTO, a Leaving-Taking Surge Expected

Vacation rentals website VacationRenter recently surveyed 1,021 current employees about their experiences with paid time off (PTO) in 2020 and their plans for PTO in 2021. Among the results:

  • 41 percent of employees said they took less time off in 2020 compared to previous years.
  • Nearly 37 percent plan to take off more this year than they did in 2020.
  • 46 percent plan to take more "mental health" days off this year, to reset and recoup from the physical and emotional stress of the past year.

Employees also said the most helpful actions companies can take to encourage PTO use are:

  • Offering companywide days off (40 percent).
  • Offering additional time off as a reward for performance (39 percent).
  • Tracking days off and encouraging PTO if employees haven't used it (37 percent).

Nearly half of respondents (46 percent) said they haven't been taking time off, saving it for later this year after the pandemic ends.

"With vaccines being administered, we expect to see an increased [number] of employees taking time off," VacationRenter noted. "Companies need to prepare for an increased amount of PTO requests and recognize the positive effect this time off provides their team."

Employers can support employees by letting them know when it's time to take a break or by offering more companywide vacations and holiday closures, "which can take the pressure and judgment off of 'taking too much time' when it's needed," the company said.


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