Whether you’re an employee or a business owner, paid time off is an essential part of the job. As an employee, you want to know whether you’re getting enough PTO; as a business owner, you need to make sure you’re giving employees enough PTO.
Unfortunately, many PTO statistics are just noise rather than helpful in answering your questions. That’s why I wrote this guide covering statistics on the average PTO in the USA, along with tips to make sure your PTO is where it should be.
Key PTO Stats for Employees to Know if You Have Enough
Not all states require companies to provide paid time off. If you live in a state without PTO laws, your company can decide whether to provide paid time off, including sick time, paid holidays, vacations, and personal days. Some companies might also offer paid time off for specific usages, like vacations, but not for others, like personal days.
According to the Bureau of Labor Statistics (BLS), most American workers get 10 to 14 days of paid vacation after working for one year at the same company. After five years, it’s more common to get 15 to 19 days.
However, paid vacation is only one piece of the PTO puzzle. Here’s how paid holidays and other forms of PTO should stack up for employees.
A paid holiday is a day that a company is closed but still pays its employees for. Many U.S.-based companies have several holidays each year, including Christmas, New Year’s Day, and Independence Day. However, not all companies pay employees, despite the fact that they can’t work days when their company closes.
BLS data from 1996 showed that U.S. companies offered an average of 7.6 paid holidays to full-time workers. This number should also be considered standard today to account for typical federal holidays that many companies close for.
If you have fewer than seven paid holidays each year, you’re not getting enough. Generous companies typically offer 10 or more paid holidays.
Better yet, some of the biggest, most modern companies are beginning to prioritize flexible PTO and vacations. Many of these companies, like Netflix and Evernote, lump paid holidays into single PTO buckets, allowing employees to take paid time off for holidays that may not even be included in the company’s holiday schedule.
I mentioned a single PTO bucket, which is what many employers are starting to use to manage PTO. A single PTO bucket combines several forms of paid time off, including sick time, vacations, holidays, and personal days.
As a business owner, this is my favorite way to manage PTO, both for the company’s benefit and for employees. It’s easier to manage, and it lets employees use their time off more flexibly without having to adhere to a specific number of days for sick time, vacation, or other forms of leave. As of March 2021, 71% of U.S. employees had single-bucket PTO at their jobs.
Companies in the United States give employees an average of 10 PTO days per year, so if you’re getting at least 10, your benefits are in line with many other workers across the country.
However, companies offering 15 or more PTO days are generally considered generous with their benefits. This is especially true if the company does not include paid holidays in your PTO bucket. If paid holidays are included, you should be getting 20 or more days of PTO to afford you plenty of time for vacations, sick days, and personal time off.
Key PTO Stats for Business Owners and Managers
As a business owner or manager, you need to decide how much PTO you offer compared to what’s usually offered. Do you want to give employees the bare minimum or go above and beyond what most companies provide? You basically have four options here, so let’s break them down.
Only What’s Required
Some states require a specific amount of paid time off per hours worked. For example, Nevada requires 0.01923 hours of paid leave per hour worked, while Washington requires at least one hour of paid leave for every 40 hours worked.
This is the bare minimum required by the state, but you can certainly choose to align your PTO policy with state law and not offer more PTO. Federal law does not require any paid time off, so as long as you follow your state law, you’re remaining compliant. This includes any requirements for sick time and PTO limitations, so be sure to check the nuances of your state’s law to ensure that you’re meeting each facet of the law.
In states without any required paid time off, you’re free to make your own PTO policy, including not offering any PTO. However, you’ll still need to comply with the Family and Medical Leave Act for unpaid time off.
Whatever you choose, have a clear, detailed policy that’s easy for employees to understand. You must stick to this policy, as it’s a legally binding contract between you and your workers.
If you decide not to offer PTO or give the minimum amount required, think about the potential drawbacks, such as low employee satisfaction and potentially high turnover rates. Considering this, it might be worthwhile to implement more than what’s required.
If you provide some paid time off beyond what’s required, your company might be offering barely enough. It’s not necessarily a negative, as it can ensure that your employees are definitely covered regarding their PTO in states with PTO requirements.
For example, if your state requires you to pay one hour of paid leave per 40 hours worked, you might consider paying 1.25 hours instead, ensuring an overage that keeps you compliant.
If you’re in a state that doesn’t require PTO, you might align your policy with the typical 10-14 days of PTO that U.S. employees receive. This amount could be enough to keep employees satisfied, especially if you offer paid holidays in addition to the employee PTO bucket, which might include sick, personal, and vacation time.
It’s fair to say that many companies offering paid time off fall into this category, as evidenced by the average PTO statistics I mentioned earlier.
Generous PTO policies offer a good amount of PTO over what’s required by law or what the average company provides employees. While 10 days of PTO might be considered barely enough, 15 days of PTO—the same as giving three weeks—is typically considered a generous policy.
Additionally, companies with generous PTO policies usually offer about 10 paid holidays, which are not counted against an employee’s paid leave allowance. These companies may also have separate policies for jury duty, bereavement, and parental leave, allowing plenty of paid leave for each situation that doesn’t come out of an employee’s bucket for sick time or vacation.
If you want to boost employee morale and satisfaction, going this route is your best bet. It shows that your company goes above and beyond what’s expected to ensure better outcomes for workers. Anything you can do to help employees worry less about their benefits is usually a solid win for them and the company.
Cutting-edge policies are becoming more prominent as companies work toward more flexible benefits for employees. These policies really push the envelope on what it means to offer paid time off by providing employee benefits that aren’t typically offered.
For example, an employer might have a truly unlimited PTO policy, allowing employees as much time off as they need, so long as they request time off with notice. Even 4-5 weeks of PTO each year could be considered cutting edge, as many companies with caps typically limit PTO to three weeks annually.
Other examples of a cutting-edge PTO policy might include four-day work weeks for a few months or a few weeks each month, paid sabbaticals after a few years of work, or a full summer or winter break.
Companies are free to tailor their PTO policies to the needs of their employees as long as it meets their state law minimums. If you want your company to be considered a groundbreaker regarding PTO, think about what your employees really want and need and find creative ways to meet those needs.
How the USA Compares to Other Countries
The United States is one of very few countries that does not mandate paid time off for workers. Meanwhile, workers in the European Union are entitled to at least four weeks or 20 days of paid leave annually, while some countries top 30 average paid days off per year, including Bangladesh, Cambodia, and Madagascar.
It’s clear that the USA is far behind most of the world regarding paid leave. While the country does mandate family and parental leave through FMLA, this mandated leave is unpaid; it’s a company’s choice whether it wants to pay employees to take their allowed time off.
Data from the Washington Center for Equitable Growth shows that many Americans work more than 45 hours a week, yet many households still require two incomes to make ends meet.
One way to level the playing field and give employees much-deserved time off is by implementing a PTO policy that moves far past PTO averages and minimums, instead giving workers ample time to rest and recharge.