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A new twist on old vacation policies for some Americans

Some American employers are adding a twist to time off. (Patrick Baz/Getty Images)

Some American employers are adding a twist to time off.

Across the European Union as well as in Australia and New Zealand employees are treated to at least 20 days of paid vacation time each year. Indeed, in parts of Europe, you’d be hard-pressed to find many employees on the job in the month of August when it seems entire countries slow or shut down.

In the United States, however, vacation time is something to be negotiated in a job offer and many employees do not end up taking advantage of all the days they are offered. 

“I’ve seen estimates that 65% to 70% of people in the US do not use all the vacation that’s available to them,” said Julie Stich, research director of the International Foundation of Employee Benefit Plans, a non-profit organization. But, even as US workers leave vacation days on the table, some US employers are becoming more generous with the amount of time off they offer and more flexible in how it is used.

Rather than earmarking a certain number of days for a particular category of leave — say, the traditional 10 vacation days and 5 sick days — more US employers are moving toward offering employees all-inclusive paid time off plans that combine vacation, sick and personal days. Don’t take many sick days per year? These paid time off plans can translate to more paid vacation time.

About 52% of companies now offer such plans, according to a study released earlier in June by the Society for Human Resource Management’s (SHRM) 2013 Employee Benefits Report. That is up from 42% five years ago, said Evren Esen, Survey Research Center manager for SHRM.

“I think what we are seeing in general is that more companies are putting employees in the driver seat, so to speak,” said Esen of the shift in US employers’ time off plans.

While this trend toward autonomy and flexibility is generally regarded as positive, many US employers still do not offer any paid time off for employees. The May No-Vacation Nation Revisited report from the non-profit, nonpartisan Center of Economic Policy and Research pinpointed the US as the only “advanced economy that does not guarantee its workers any paid vacation time”. As a result, 25% of workers, generally minimum wage and part-time labourers, or small business employees, have no paid vacation or holidays.

The report analyzed data from 21 “rich countries” (16 in Europe, plus Australia, Canada, Japan, New Zealand and the US). Those employed in the European Union have a guaranteed 20 paid vacation days annually, with some receiving as many as 25 to 30 days in some countries. In both Canada and Japan every worker is entitled to 10 paid vacations days per year.

US workers are not alone in leaving vacation on the table each year. In Japan, for instance, people take an average of five days of their annual allotment, according to the 2012 Expedia Vacation Deprivation study. Japan earned the survey’s title of “most vacation-deprived nation”, even ahead of workers in the US.  Those in America with paid vacation days leave about two unused per year.

Both studies bolster conceptions of how various cultures approach work and time off.

“With the US and Asia, for example, you might perceive (people) as working all the time and not taking as much time off as opposed to say, in Europe,” Stich said.

There are a number of reasons why people leave vacation days unused, but much of it has to do with fear. For some, the prospect of returning to an overflowing email and work inbox is too overwhelming to make the time off feel worthwhile. Other people worry that “their commitment to their job will be suspect if (they) take all their time off,” Stich said.

All-inclusive paid time off plans not the only newly popular twists on time off.  For instance, salaried Kimberly-Clark employees in North America have the option of purchasing up to five additional vacation days per year. For the past several years, about 30% of employees at the consumer products company responsible for brands like Kleenex tissues and Huggies diapers have opted to buy extra days, said Bob Brand, external communications director for the company. The cost of each extra vacation day is equal to a day’s pay. About 5% of companies offer such an option, according the SHRM report.

A small number of companies — about 1% in the US — offer unlimited time off to employees while 19% let employees cash-out unused time off, according to the SHRM report. 

Whether it is one day off or a full vacation, Stich said time off is important for both mental and physical health.

“You come back and have a better perspective,” she said. “Your enthusiasm is renewed and you have more creative ideas about how to approach problems at work.”       

Correction: A previous version of this article misspelled Evrn Esen's name. This has been fixed.

More companies are putting employees in the driver seat, so to speak. — Evren Esen