August 1996

Leave of Absence Benefits

Paid leave is one of the most common benefits offered by employers. In 1993, in medium and large private establishments, 91 percent of full-time employees participated in paid holidays; 97 percent in paid vacation leave; and 65 percent in paid sick leave. Among full-time employees in state and local governments in 1994, 73 percent participated in paid holidays; 66 percent in paid vacation leave; and 94 percent in paid sick leave.

Among full-time employees in medium and large private establishments in 1993, the average number of paid holidays was 10.2. The average number of vacation days ranged from 9.4 days after 1 year of service to 21.6 days after 25 years of service. The average number of paid sick leave days ranged from 12.0 days after 1 year of service to 24.5 days after 25 years of service.

In 1994, the average number of paid holidays for a full-time state and local government employee was 11.5 days. The average number of vacation days ranged from 12.3 days after 1 year of service to 22.6 days after 25 years of service. The average number of paid sick leave days ranged from 13.2 days after 1 year of service to 14.0 days after 20 years of service.

Employers have different rules regarding what an employee can do with unused vacation leave at the end of a calendar year. Among full-time employees in medium and large private establishments in 1993, 29 percent could only carry over some or all of the unused vacation leave; 10 percent could only cash in the unused leave; and 8 percent could either carry over or cash in the unused leave. Fifty percent lost unused vacation leave.

Among full-time state and local government employees in 1994, 72 percent were allowed only to carry over some or all of the unused vacation time; 2 percent were allowed only to cash in the unused leave; and 8 percent could either cash in or carry over the unused leave. Sixteen percent lost unused vacation time.

In 1995, in the private sector, paid leave cost employers $1.09 per hour worked, or 6.4 percent of total compensation. Vacation leave cost $0.54 (3.1 percent of total compensation); holidays, $0.37 (2.2 percent of total compensation); and sick leave, $0.14 (0.8 percent of total compensation).

In 1995, among state and local governments, paid leave cost employers $1.95 per hour worked, or 7.9 percent of total compensation costs. Vacation leave cost state and local government employers $0.68 (2.7 percent of total compensation); holidays, $0.63 (2.5 percent of total compensation); and sick leave, $0.49 (2.0 percent of total compensation).

To help contain costs and give employees more flexibility and personal responsibility, some employers have initiated a paid time off (PTO) bank. Under a PTO bank, an employee receives a specified allotment of days off. The employee then records the leave simply as time off. According to a 1994 survey, 17 percent of surveyed employers had implemented a PTO bank, and a further 13 percent were considering implementing one.

With an increasingly globalized economy, comparisons between U.S. employment practices and those of the rest of the world are being focused on. Many countries currently have a legally required minimum number of vacation days: France (25), Brazil (22), Japan (19), and Hong Kong (7). The United States and the United Kingdom do not require a minimum number of vacation days.

For more information, contact Ken McDonnell (202) 775-6342.

Source: EBRI Databook on Employee Benefits, second edition, 1995; EBRI Issue Brief no. 119, "Questions and Answers about Employee Benefits" (October 1991); and EBRI Special Report SR-6, "An Overview of Employee Benefits Supportive of Families" (February 1990).
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