Though Paid Leave Benefits Are Common, Industry Groups Seek Nationwide Standard

Paid leave benefits provide an opportunity for employers to set themselves apart, as flexible, paid time off can attract talent, prevent employees from experiencing burnout and retain workers by allowing them to have a healthy work-life balance.

The International Foundation of Employee Benefit Plans’ recent survey on paid leave trends in the U.S. provided a glimpse into what organizations are currently offering for vacation, sick leave, parental leave and bereavement leave. The IFEBP conducted its survey in October 2023, surveying more than 300 U.S. corporations and public employers/governmental entities on policies for both full- and part-time employees.

Although federal law does not require employers to offer paid vacation time to their workers, nearly all (99%) companies surveyed reported offering this benefit, and for most organizations, the number of available paid vacation days increases with the length of service. The majority of employers also said they allow for some unused PTO days to be carried over to the next year.

When asked about the use of PTO, 42.7% of respondents said most of their company’s employees use their PTO, but heavy workload was the most common reason cited for workers not using PTO, followed by a lack of adequate staffing and needing to coordinate time off with other staff members.

Most employers said they encourage their salaried and hourly employees to take PTO but do not require a minimum level of usage. Only 9% of employers reported offering unlimited PTO or unlimited vacation. The IFEBP found that most organizations with unlimited PTO began offering it within the last four years.

The majority of employers (71.8%) said the reason they offer a PTO plan is because it offers employees flexibility, and 49.1% said it empowers employees.

Almost all employers also reported offering paid sick leave, including 11% mandated by state or local laws. Unlike PTO or vacation, most organizations provide a flat number of sick days, regardless of length of service, for salaried and hourly workers. The number of sick days offered is very similar for salaried and hourly employees, as the majority of organizations offer between six and 10 days.

Paid parental leave is slightly less common, but still offered by a majority, as 62% reported offering this benefit. Among those offering paid parental leave, different types reported include PTO for:

• Adoption (76%)
• Bonding (68%)
• Maternity (67%)
• Paternity (66%)
• Parental/family leave (64%)
• Foster care (50%)
• Surrogate leave (for intended parents, not the surrogate) (32%)
• Leave related to miscarriage (29%)
• Fertility treatment (8%)

Bereavement leave is the most offered leave besides vacation, as 90% of organizations offer this benefit. Most organizations that offer bereavement leave do so in a separate plan, and the average number of days off provided varies by the relationship of the deceased to the employee. For example, leave for the death of a close friend or chosen family member is typically one day, whereas immediate family is typically five days.

The report explained that bereavement leave policies were originally enacted to give employees time to handle the logistics of funeral arrangements, which is why most employers still offer a relatively small number of days. However, employers are increasingly realizing that employees need more time to grieve, and many are expanding this benefit.

In related news, the American Benefits Council sent a letter to Congress on Tuesday, urging lawmakers to expand access to paid leave for all Americans. The letter was a response to a request for information issued by a bipartisan working group on paid leave in late 2023, seeking “suggestions for expanding access to paid parental, caregiving and personal medical leave in a bipartisan and fiscally responsible way.”

The American Benefits Council proposed a voluntary federal private employer plan option for paid family and medical leave benefits, under which employers who provide a minimum standard of paid family and medical leave benefits would be deemed in compliance with any state requirements. The council argued that using this approach, state paid family and medical leave programs would continue to operate and play a “core role” in delivering paid leave benefits to employees not covered by an employer-provided plan that satisfies such standards.

The ERISA Industry Committee submitted comments on paid leave on Wednesday, arguing that the array of state efforts expanding access to paid family and medical leave benefits has created a complex and “incompatible” system of state laws that have raised compliance costs and administrative complexity. ERIC emphasized the need for the working group to explore proposals that “harmonize paid leave standards” so that employers and workers can benefit from an improved system that promotes “efficiency and uniformity.”