Paid Time Off Programs and Practices. WorldatWork September 2014

Transcription

1 Paid Time Off Programs and Practices WorldatWork September 2014

2 About WorldatWork The Total Rewards Association WorldatWork ( is a nonprofit human resources association for professionals and organizations focused on compensation, benefits, work-life effectiveness and total rewards strategies to attract, motivate and retain an engaged and productive workforce. WorldatWork and its affiliates provide comprehensive education, certification, research, advocacy and community, enhancing careers of professionals and, ultimately, achieving better results for the organizations they serve. WorldatWork has more than 65,000 members and subscribers worldwide; 95 percent of Fortune 500 companies employ a WorldatWork member. Founded in 1955, WorldaWork is affiliated with more than 70 local human resources associations and has offices in Scottsdale, Ariz., and Washington, D.C. Contact: WorldatWork Customer Relations N. Northsight Blvd. Scottsdale, Arizona USA Toll free: Fax CustomerRelations@worldatwork.org WorldatWork Society of Certified Professionals is the certifying body for six prestigious designations: the Certified Compensation Professional (CCP ), Certified Benefits Professional (CBP), Global Remuneration Professional (GRP ), Work-Life Certified Professional (WLCP ), Certified Sales Compensation Professional (CSCP) and Certified Executive Compensation Professional (CECP). The WorldatWork group of registered marks also includes: Alliance for Work-Life Progress or AWLP, workspan and WorldatWork Journal WorldatWork Any laws, regulations or other legal requirements noted in this publication are, to the best of the publisher s knowledge, accurate and current as of this report s publishing date. WorldatWork is providing this information with the understanding that WorldatWork is not engaged, directly or by implication, in rendering legal, accounting or other related professional services. You are urged to consult with an attorney, accountant or other qualified professional concerning your own specific situation and any questions that you may have related to that. No portion of this publication may be reproduced in any form without express written permission from WorldatWork.

3 Introduction & Methodology Organizations are regularly faced with the evaluation of various paid-time-off (PTO) programs. Traditional PTO systems separate time-off categories between vacation, sick, personal time, etc. Managers and total rewards professionals are subsequently obligated to track employees time off and the reasons for their absences. Many employers are adopting a PTO bank, giving the employee a cumulative number of paid days off that employees use as they wish for sick days, vacation and/or other personal needs. WorldatWork conducted a survey of U.S. organizations to better understand PTO-bank style and traditional system (e.g., vacation time, sick time, personal days, etc.) programs and practices. Similar surveys were conducted by WorldatWork in 2002, 2006 and On May 21, 2014, WorldatWork successfully ed 5,524 survey invitations to WorldatWork members working as benefits specialists and some randomly selected members. The survey closed on June 6, 2014, with 705 responses, a 13% response rate. This survey was intended to assess PTO practices in the United States only. In order to provide the most accurate data possible, data was cleaned and analyzed using statistical software. Any duplicate records were removed, resulting in a final dataset of 674 responses. Outlier responses were analyzed and if considered extreme, were removed from the analysis. Data comparisons with any relevant, statistically significant differences are noted with this report. The demographics of the survey sample and the respondents are similar to the WorldatWork membership as a whole. The typical WorldatWork member works at the managerial level or higher in the headquarters of a large company in North America. The frequencies of response distributions listed in the report show the number of times or percentage of times a value appears in a data set. Because of rounding, frequencies of data responses provided in this survey may not total exactly 100%. Paid Time Off Programs and Practices WorldatWork 1

4 Table of Figures Demographics Figure D1: Organization Size... 4 Figure D2: Industry... 4 Figure D3: Sector... 5 Figure D4: Voluntary Turnover Rate... 5 PTO Systems Figure 1: PTO System Prevalence Figure 2: PTO System Prevalence and Organization Size Figure 3: PTO System by Organization Size and Yearly Comparison Figure 4: Select Industry by PTO System Prevalence Figure 5: Organization Type by PTO System Prevalence Figure 6: Employee Turnover by PTO System Prevalence Figure 7: PTO Program Type Variations by Employee Segments or Levels PTO-Bank-Type System Figure 8: Absence Type Figure 9: PTO Days Offered Figure 10: 2010 and 2014 Comparison of the Average Number of Days Allocated Under a PTO-Bank-Type System Figure 11: Method of Crediting PTO Figure 12: PTO Eligibility Figure 13: PTO Credited to Employees Figure 14: Maximum Accumulation Time Figure 15: Smallest Increments Employees May Use PTO Figure 16: Unused PTO at the End of an Annual Cycle Figure 17: Options for PTO Balance at the End of a Year Figure 18: Options for PTO Balance Upon Separation Figure 19: Length of Time with a PTO Bank Figure 20: Motivations for Implementing a PTO-Bank System Figure 21: Effect on Organization when Implemented Figure 22: PTO Bank and Attraction Traditional PTO System Figure 23: Separate Categories for PTO Days Figure 23a: PTO Categories Comparison by Program Type Figure 24: Traditional System and Attraction Figure 25: Considering Changing to a PTO-Bank System Paid Time Off Programs and Practices WorldatWork 2

5 Figure 26: Number of Vacation Days Granted Figure 27: Number of Vacation Days Granted Yearly Comparison Figure 28: Number of Sick Days Granted Figure 29: Number of Sick Days Granted Yearly Comparison Figure 30: Number of Personal Days Granted Figure 31: Number of Personal Days Granted Yearly Comparison Figure 32: Method for Crediting Days Off Figure 33: Method for Crediting Sick Days Figure 34: When Days Off are Credited to Employees Figure 35: When Employees Become Eligible to use Time Off Figure 36: Maximum Number of Days Accumulated Figure 37: How Unused Days are Handled at the End of a Cycle Figure 38: Options for Unused Days Off at the End of a Cycle Figure 39: Options for Unused Days Off Upon Separation Paid Holidays Figure 40: Observed Holidays Figure 41: Number of Floating Holidays Sabbatical Leave Figure 42: Sabbatical Program Prevalence Figure 43: Eligibility for Sabbatical Leave Figure 44: Limits on Sabbatical Leave Donation of Leave Figure 45: PTO Purchase or Borrow Options Figure 46: PTO Donation Figure 47: PTO Donation Structure General Figure 48: PTO for Part-Time Employees Figure 48a: PTO for Part-Time Employees by PTO System Figure 49: PTO Programs and Competitive Labor Markets Figure 50: PTO Programs and Competitive Labor Markets by PTO System Figure 51: PTO Allocation and Part-Time Employees Figure 52: Federal Mandates and PTO Figure 53: Federal Mandates Higher than What is Currently Offered Paid Time Off Programs and Practices WorldatWork 3

6 Demographics Figure D1: Please choose the total number of full-time employees (FTEs) your organization employs worldwide: (n=616) Option Percent Less than 100 employees 5% % % 1,000-2,499 18% 2,500-4,999 14% 5,000-9,999 12% 10,000-19,999 8% 20,000-39,999 7% 40,000-99,999 5% 100,000 or more employees 2% Figure D2: Please choose one category that best describes the industry in which your organization operates: (n=617) Industries totalling1% or less have been excluded from this table. Option Percent All other manufacturing 15% Finance and insurance 14% Consulting, professional, scientific and technical services 11% Health care and social assistance 10% Utilities, oil and gas 5% Retail trade 4% Educational services 4% Real estate, and rental and leasing 3% Pharmaceuticals 2% Computer and electronic manufacturing 2% Wholesale trade 2% Accommodations and food services 2% Other services (except public administration) 2% Public administration 2% Other 16% Paid Time Off Programs and Practices WorldatWork 4

7 Figure D3: Your organization is: (n=611) Private sector - privately held 41% Private sector - publicly traded 34% Nonprofit/not-for-profit (educational organizations, charitable organizations, etc.) 15% Public sector (local, state, federal government) 11% 0% 20% 40% 60% Figure D4: What is the approximate annual voluntary turnover for employees? (n=598) Option Percent 0%-5% 22% 6%-10% 39% 11%-15% 22% 16%-20% 9% 21%-26% 3% 27%-40% 3% 41% or more 2% Paid Time Off Programs and Practices WorldatWork 5

8 Executive Summary PTO System Prevalence The use of PTO-bank-type systems increased steadily between 2002 and 2010 as the use of traditional systems declined. Many organizations converted from a traditional plan to a PTO-bank-type system. According to the chart below, though, this trend seems to have stalled in recent years, with both PTO bank and traditional plan prevalence leveling out in this year s survey findings. Traditional system with vacation time, sick time, personal time PTO-bank-type system Other 71% 63% 54% 56% 40% 41% 33% 28% 4% 5% 1% 2% Percent of Companies Using PTO Programs 1 1 In 2002, organizations reported the highest statistically significant rates of traditional PTO-system usage over all other years. In 2010 and 2014, organizations reported statistically significantly lower rates of traditional PTO-system usage since In 2014, organizations reported statistically significantly higher rates of PTO-bank-type systems since 2002 and In 2010, organizations reported statistically significantly higher rates of PTO-bank-type systems since Paid Time Off Programs and Practices WorldatWork 6

9 The changing trend line is not necessarily surprising or of concern. While having grown considerably in usage in the past 12 years, a PTO-bank-type system a defined plan that offers a combined bucket of available days to be used for a variety of types of absences is not for every organization. The plateau in trend lines may be an indication that the majority of organizations for which a PTO-bank-type system is ideal currently have them in place, and the remainder may be content with traditional plans. The type of PTO program most appropriate for an organization depends on the organization s objectives, company culture, workforce demographics, employee perceptions and other considerations. Additionally, there may be financial costs or liabilities associated with a transition from one plan to another, which may also be contributing to the leveled-off prevalence for both types of programs. For example, a PTO-bank-type system usually incurs greater liability for the company because most (81%) payout unused, earned PTO at the time of employee separation. (See Figure 18.) Under a traditional plan, vacation is often paid out at separation but not sick or personal days. (See Figure 39.) Other considerations that weren t tested in this survey, but may prevent more organizations from converting to PTO-bank-type systems, are: Depending on an individual employee s sick-time usage, the amount of available days to the employee under a PTO-bank-type system could be more or less, creating a potential employee-relations issue with some employees perceiving greater rewards with a PTO-banktype system and others perceiving fewer rewards with a PTO-bank-type system. Concerns that employees may view PTO as a lump sum of vacation time they want to preserve, which could cause them to come to work sick, exposing others and/or leading to reduced organizational productivity. Fear that employees may abuse PTO or waste it early in the year because they no longer need to allocate specific days for specific reasons. Prevalence by Industry, Sector and Size Of the industries that received sufficient response to this survey, all but the finance and insurance industry seem to have a strong preference toward one system or the other, with a couple industries noting more extreme results. (See Figure 4.) In 2014, 72% of health-care and social assistance companies use a PTO-bank-type system, which is not surprising because PTO banks primarily originated in the hospital industry and in other organizations that have 24/7 operations. Two-thirds of organizations classified as All other manufacturing use traditional PTO systems. Six in every 10 nonprofit/not-for-profit organizations have a PTO-bank-type system (61%), while as many in the remaining sectors report use of traditional systems. (See Figure 5.) Organization sizes between 1,000 and 9,999 are more likely to have traditional PTO systems over PTO-bank systems. (See Figure 2.) In larger organizations, it is not unusual to find PTO-style banks because these programs are easier to administer than traditional systems. Paid Time Off Programs and Practices WorldatWork 7

10 PTO Amounts Because of fundamental differences in the two main types of PTO programs, the total number of paid days off earned or allocated may not be an apples-to-apples comparison. However, for organizations considering a shift from one program to the other for example, a move from a traditional to a PTObank-type system, which was a notable trend in prior surveys the comparison tends to be made and is therefore noted below. As indicated in the following chart, there are more total paid days off to be earned under traditional systems than under PTO-bank-type systems. PTO-bank-type plans tend to offer fewer days, but have greater usage flexibility and ease of administration, while traditional systems offer more total days off to employees, but usually have more usage limitations and are more labor-intensive to administer. Average Total Number of Paid Days Off by Employee Tenure and Type of Program PTO-Bank Type Traditional System (Vacation, Sick and Personal Day Averages Combined) Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service Other fundamental differences that are likely at play when it comes to the differences in total allocation of days off are separation payouts and carry-over limitations. The typical PTO bank is intended to cover absences that would otherwise be covered by sick or personal days in a traditional plan, but those categories of time off under a traditional plan would often not be paid out at the time of separation or be carried over from one fiscal year to another. Under PTO-bank-type systems, all earned days are used for a variety of purposes and, as an earned benefit, often payable upon separation. (See Figure 18.) Days that might be allocated under a traditional system for personal or sick days would not usually be payable upon separation. Many companies converting from a traditional system to a PTO-bank-type system tend to place a lower total number of days into the PTO bank; however, the ability to use all days for a variety of purposes and flexible access to sick time that may not otherwise be exhausted by the employee, tends to lead to more usable paid days off for employees. As seen in Figure 20, the flexibility PTO banks offer employees is the primary motivator for organizations implementing such systems. Paid Time Off Programs and Practices WorldatWork 8

11 PTO-Bank-Type Systems Amount of PTO The amount of PTO an employee receives on an annual basis usually grows with employee tenure at an organization, ranging from 16 to 28 paid days off per year. (See Figure 9.) This year s findings show that scenario continuing, but only one tenure period employees with less than one year of service grew since 2010, up to 16 days from 15. All other service thresholds receive the same or one less paid day off each year since last surveyed in (See Figure 10.) This increase in the number of days being offered to employees within their first year of service may be an indicator of the need to attract quality employees who may have several years of service with other organizations and have accumulated significant time off, as well as simply being more competitive in attracting employees. Method of Crediting Time The most prevalent method for crediting PTO to employees is accruals throughout the year (82%), as opposed to yearly allocation at one specific time (18%). (See Figure 11.) New Hire Accruals and Use In 2010, only 40% of organizations allowed employees to use PTO as of the date of hire. This number increased to 56% in (See Figure 12). Although survey results indicate most organizations operate on an accrual basis, it appears that most employees begin immediately accruing time when they begin employment and are eligible to use such time, once earned. This is most likely competitive with other companies, and addresses the need for attracting employees and allowing them to begin building their available time immediately with their date of hire. Part-time Employee Eligibility Organizations with a PTO bank are more likely to offer PTO to part-time employees (81%) over organizations with traditional systems (69%). (See Figure 48a.) Paid Time Off Programs and Practices WorldatWork 9

12 Traditional PTO Systems Amount of PTO Like with PTO-bank-type systems, the average number of paid vacation and sick days off an employee receives under a traditional system grows with longer tenure. Organizations with traditional systems offer an average of nine to 22 days of vacation and seven to nine days of sick leave annually, depending on employee tenure. Personal days offered appear not to change with employee years of service, the average is three days per year for all employee tenure levels. Traditional PTO System Vacation (n=349) Sick (n=253) Personal (n=154) 25 th 50 th 75 th Average/ Mean 25 th 50 th 75 th Average/ Mean 25 th 50 th 75 th Average/ Mean Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service For employees with less than one year of service, the average number of vacation days and personal days grew since Vacation days for new employees are up to nine days from eight, and personal day allowances are up to three days from two. (See Figures ) Organizations with a traditional PTO system are statistically significantly more likely to report higher percentages in the low turnover category (65%) than organizations with a PTO-bank-type system (35%). Paid Time Off Programs and Practices WorldatWork 10

13 Sabbaticals There was no change in the number of companies offering sabbaticals since Eighty-six percent of participating organizations continue to report that they do not offer a sabbatical leave program. However, for those organizations offering this benefit, there was a slight uptick in the Does your organization currently offer a number of companies providing full pay in 86% 86% sabbatical leave program? the 2014 survey, over both partial pay and no pay (n=624) 2010 (n=936) Fifty-four percent of respondents in the 2014 survey indicated that in order for an employee to be granted a sabbatical, they were required to complete a specific number of years of employment. Participants selecting this option commonly noted five to nine years and 10 to 15 years. (See Figure 43.) 7% 10% 5% 3% 2% 2% No Yes, unpaid Yes, at full pay Of the 49% that imposed a limit on the number of sabbaticals that could be taken, the amount varied from one every year to no more than one every 10 years. (See Figure 44.) Yes, at partial pay Leave Donations Slightly more organizations overall reported offering the benefit of leave donation in 2014; although, employers who offer a PTO-banktype system are more likely to offer this benefit than those with traditional systems. (See Figure 45.) Does your organization allow employees to purchase or borrow additional paid leave time beyond what they are allocated? 81% 84% 2014 (n=602) 2010 (n=932) 19% 16% Yes No Paid Time Off Programs and Practices WorldatWork 11

14 PTO and Competition for Talent The top three primary motivators for implementing a PTO-bank system are to grant employees more flexibility (49%), easier to administer (20%) and to stay competitive with other companies (14%). For 2010, the top three were easier to administer (38%), to stay competitive with other companies (26%) and reduce absenteeism (21%). This shows that absenteeism is no longer a top reason, having reduced from 21% in 2010 to 7% in Perhaps, with the Great Recession and organizational focus on satisfying employee demands for more workplace flexibility, there has been a shift in the reasons for implementing PTO banks. Historically, these Option 2010 (n=273) 2014 (n=197) To grant employees more flexibility n/a 49% Easier to administer 38% 20% To stay competitive with other companies 26% 14% Cost effectiveness n/a 7% Reduce absenteeism 21% 7% Improve employee morale 4% 1% Other n/a 2% types of systems were implemented to address issues of high absenteeism. The 2014 survey results indicate that PTO-style banks today are used more to grant employees greater flexibility, and absenteeism is not the primary motivator. What this implies is that being able to meet workforce flexibility issues through avenues, such as a PTO bank, gives employees more control over managing their time off, and thus engages employees more and positively impacts workforce productivity. Regardless of the impact to absenteeism rates and any related costs, organizations feel that any such costs are outweighed by the benefits of having a supportive, flexible work environment. Paid Time Off Programs and Practices WorldatWork 12

15 Results and Analysis PTO Systems Figure 1: For your largest workforce segment/level, does your organization currently use a traditional paid time off system in which each employee is allocated a certain number of paid days in categories (i.e., vacation, personal, sick, etc.), or does it use a PTO bank-type system in which paid vacation, sick, personal leave, etc. is combined into one category of available time off? (n=674) Traditional system with vacation time, sick time, personal time, etc. 56% PTO bank-type system 41% My company offers unlimited leave (time off that is not specifically allocated or tracked, but typically at the discretion of management with no limit) 1% My company does not offer paid leave of any kind 0% Other 2% Percent Paid Time Off Programs and Practices WorldatWork 13

16 Figure 2: Organization Size by PTO System Prevalence 2 3 Traditional system PTO bank-type system Less than 100 employees (n=27) 41% 59% (n=91) (n=74) 1,000-2,499 (n=102) 2,500-4,999 (n=89) 5,000-9,999 (n=83) 10,000-19,999 (n=53) 20,000 and over (n=80) 59% 47% 60% 61% 61% 55% 60% 41% 53% 40% 39% 39% 45% 40% Figure 3: 2010 and 2014 Comparison of PTO Systems Prevalence by Organizational Size Traditional System PTO Bank n= Less than 100 employees 52% 41% 48% 59% % 59% 41% 41% % 47% 40% 53% 1,000-2,499 54% 60% 46% 40% 2,500-4,999 53% 61% 47% 39% 5,000-9,999 53% 61% 47% 39% 10,000-19,999 49% 55% 51% 45% 20,000 and over 68% 60% 32% 40% 2 Organizations with 1,000 to 2,499, 2,500 to 4,999 and 5,000 to 9,999 employees all report at statistically significantly higher rates having a traditional PTO system over a PTO-bank system. 3 The group Less than 100 employees has fewer than 30 employees. Data corresponding to larger sample sizes will have stronger statistical power and validity. Paid Time Off Programs and Practices WorldatWork 14

17 Figure 4: Select Industry by PTO System Prevalence Traditional System PTO-Bank-Type System All other manufacturing (n=88) 4 66% 34% Finance and insurance (n=84) 50% 50% Consulting, professional, scientific and technical services (n=58) 40% 60% Health care and social assistance (n=65) 5 28% 72% Other (n=100) 52% 48% Figure 5: Organization Type by PTO System Prevalence 6 7 Traditional system PTO-bank-type system Public sector (local, state, federal government) 65% 35% Private sector - publicly traded 61% 39% Private sector - privately held 59% 41% Nonprofit/not-for-profit (educational organizations, charitable organizations, etc.) 39% 61% 4 Organizations classified as All other manufacturing are statistically significantly more likely to report having a traditional PTO system over a PTO-bank system. 5 Organizations classified as Health care and social assistance are statistically significantly more likely to report having a PTO-bank-type system over a traditional system. 6 Public sector (65%), private sector publicly traded (61%) and private sector privately held (59%) organizations all report at statistically significantly higher rates having traditional PTO systems. 7 Nonprofit/not for-profit organizations (61%) are statistically significantly more likely to report having a PTO-bank-type system. Paid Time Off Programs and Practices WorldatWork 15

18 Figure 6: Employee Turnover by PTO System Prevalence 8 65% 55% 56% 45% 44% 35% 0% - 5% (Low) 6% - 10% (Medium) 11% -15% (High) Traditional system (n=333) PTO-bank-type system (n=249) Figure 7: Does your organization offer different paid time off programs to different workforce segments or levels? For example, does one employee classification use a traditional paid time off system and another classification use a PTO bank-type program? Or does only a specific employee group operate under an unlimited leave program while the remainder of employees use a traditional or PTO bank-type program? (n=666) Option Percent No 72% Yes, program type varies by employee level 12% Yes, program type varies by FLSA (or equivalent) classification 7% Yes, program type varies by other criteria 5% Yes, program type varies by department or location 4% Two additional follow-up questions regarding unlimited PTO programs asked what the primary reasons were for offering unlimited PTO and what the challenges were to offering a plan with unlimited PTO. The most-cited primary reason for offering an unlimited leave program was, We are a small company with professional-level staff only (n=3). The primary challenge indicated was Other None (n=2). 8 Organizations with a traditional PTO system are statistically significantly more likely to report higher percentages in the low turnover category (65%) than organizations with a PTO-bank-type system (35%). Paid Time Off Programs and Practices WorldatWork 16

19 PTO-Bank-Type System The following results include only organizations that use a PTO-bank-type system as their primary timeoff program (n=279). Figure 8: For what types of absences are employees expected to use PTO time? (n=276) Employee is expected to use PTO We offer separate programs for some or all of this type of absence Vacation 100% Personal 98% Sick 92% 8% Volunteer/community work 61% 39% Holidays 17% 83% Bereavement 95% Jury duty 97% 0% 20% 40% 60% 80% 100% Figure 9: Please indicate how many PTO days an employee of your organization is allocated annually, based on the employee s tenure in whole years. (If your employee allocation is awarded in hours, please convert to days based on the typical number of hours in a workday at your organization.) (n=266) Average 25 th 50 th 75 th Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service Paid Time Off Programs and Practices WorldatWork 17

20 Figure 10: 2010 and 2014 Comparison of the Average Number of Days Allocated Under a PTO-Bank-Type System 2010 Average 2014 Average Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service Figure 11: What is the method for crediting PTO time to employees? (n=266) 18% 82% Accrued throughout the year Yearly allocation awarded at one specific time 9 In 2014, surveyed organizations reported offering a statistically significantly higher average number of days off for employees with less than one year of service (16) (p=0.00). 10 In 2010, surveyed organizations reported offering a statistically significantly higher average number of days off for employees with one to two years of service (19) (p=0.04). 11 In 2010, surveyed organizations reported offering a statistically significantly higher average number of days off for employees with five to six years of service (23) (p=0.03). Paid Time Off Programs and Practices WorldatWork 18

21 Figure 12: When do employees in your organization become eligible to use PTO time? (n=265) 12 As of date of hire 56% Beginning of next pay period 10% Beginning of next month 7% After 6 months of employment 3% After 1 year of employment 1% After 90 days/3 months of employment 22% Specific number of days 2% Percentage Figure 13: When is PTO time credited to employees? (n=47) This question only presented if Yearly allocation awarded at one specific time in Figure 11 was selected. Beginning of the calendar year 81% Beginning of the fiscal year, if not on a calendar year schedule 4% Anniversary date of employee 4% Other 11% 0% 20% 40% 60% 80% 100% 12 In 2010, only 40% of organizations reported allowing employees to use PTO as of the date of hire. In 2014, the reported number increased to 56%, a statistically significant escalation. Paid Time Off Programs and Practices WorldatWork 19

22 Percentage Figure 14: What is the maximum number of hours an employee can accumulate in their PTO bank at any given time? (n=265) There is no maximum 12% One times the annual allocation for the employee 20% Two times the annual allocation for the employee 6% Maximums vary depending on tenure 18% Other 45% 0% 20% 40% 60% Noted answers submitted under Other : 200, 250, 320 and 480 hours. Figure 15: What is the smallest increment that an employee can use PTO time? (Please consider the usage of accumulated PTO time only; do not consider minimums that may apply to the usage of unpaid time off.) (n=264) 33% 23% 19% 13% 5% 3% 3% 15 minutes 30 minutes 1 hour 2 hours 4 hours 8 hours Other Paid Time Off Programs and Practices WorldatWork 20

23 Figure 16: Please indicate how unused PTO time for eligible employees is handled at the end of each annual cycle: (n=266) Entirely rolled over to the next year 44% Partially rolled over to the next year 37% Forfeited 18% Entirely paid out in cash 1% Entirely rolled over to a retirement vehicle 0% Partially paid out in cash 0% 0% 20% 40% 60% Figure 17: What options are available for eligible employees for the remaining PTO balance if only a portion is rolled over to the next year or paid out in cash? (Check all that apply.) (n=97) This question only presented if Partially rolled over to the next year or Partially paid out in cash in Figure 16 was selected. Remaining balance is forfeited 81% Pay out in cash 13% Donate to a shared balance for use by various employees with qualifying needs Donate to a specific employee s paid-time-off balance, who has a qualifying need Roll-over to a retirement vehicle 1% 0% 0% Other 7% Percentage Paid Time Off Programs and Practices WorldatWork 21

24 Figure 18: What options are available to eligible employees with a PTO balance upon separation of employment? (Check all that apply.) (n=262) 100% of value paid out in cash 81% All accumulated PTO time is forfeited 50% of value paid out in cash Roll-over to a retirement vehicle Donate to a shared balance for use by various employees with qualifying needs Donate to a specific employee s paid-timeoff balance, who has a qualifying need Other 6% 2% 1% 0% 0% 14% 0% 20% 40% 60% 80% 100% Figure 19: How long has your organization had a PTO bank system? (n=264) 45% 7% 6% Less than one year 1-2 years 3-4 years 5-9 years 30% 12% 10 or more years Paid Time Off Programs and Practices WorldatWork 22

25 Figure 20: What was the primary motivation(s) for implementing a PTO bank system? 13 Responses of I don t know have been removed from this analysis. Option 2014 (n=197) To grant employees more flexibility 49% Easier to administer 20% To stay competitive with other companies 14% Cost effectiveness 7% Reduce absenteeism 7% Improve employee morale 1% Other 2% Figure 21: How would you describe the effect of the PTO bank system on your organization s absentee situation when it was first implemented? (n=263) 50% 48% 2% Improved absenteeism Worsened absenteeism Had no impact on absenteeism 13 Because of differences in answer selections between 2010 and 2014, tests of statistical significance were not conducted. Paid Time Off Programs and Practices WorldatWork 23

26 Figure 22: Does your organization feature or market the PTO bank as a key employee benefit when attempting to attract new employees? (n=263) No 32% Yes 68% Traditional Leave System The following results include only organizations that use a traditional PTO system as their primary program (n=377). Fewer than 10% of organizations offer separate programs for vacation time, personal time and/or sick time under the PTO-bank-type system. Those organizations are not included in the results below. Figure 23: What separate categories of paid time off are offered to eligible employees of your organization? (Note: Flex-time or flex days do not count as paid time off.) (Check all that apply.) (n=366) Percent Vacation time 99% Jury duty 90% Bereavement leave 89% Sick time 85% Holiday (floating holidays) 82% Personal days (not PTO-bank-type leave) 43% Military leave (an actual category of paid leave, not just qualification under FMLA) 39% Adoption/maternity/paternity leave (an actual category of paid leave, not just qualification under FMLA) Volunteer/community service 22% Family sick leave (an actual category of paid leave, not just qualification under FMLA) 17% Other 7% 27% Paid Time Off Programs and Practices WorldatWork 24

27 Figure 23a: Separate Categories of Paid Time Off Offered to Employees Under a Traditional System or a PTO-Bank-Type System Absence Type Separate Programs Under a PTO-Bank- Type System Separate Programs Under a Traditional System 14 n Jury duty 15 97% 90% Bereavement 16 95% 89% Holidays 83% 82% Volunteer/community work 17 39% 22% Sick 8% 85% Personal 2% 43% Vacation 0% 99% Figure 24: Does your organization feature or market the traditional time off system as a key employee benefit when attempting to attract new employees? (n=365) No 44% Yes 56% 14 Organizations with traditional systems reported statistically significantly higher rates of offering separate programs for sick, personal and vacation PTO. 15 Under a PTO-bank-type system, organizations reported at statistically significantly higher rates offering a separate program for jury duty (97%) than under a traditional system (90%). 16 Under a PTO-bank-type system, organizations reported at statistically significantly higher rates offering a separate program for bereavement (95%) than under a traditional system (89%). 17 Under a PTO-bank-type system, organizations reported at statistically significantly higher rates offering a separate program for volunteer/community work (39%) than under a traditional system (22%). Paid Time Off Programs and Practices WorldatWork 25

28 Figure 25: Is your organization considering rolling various types of leave together to offer employees a PTO-bank type of leave that they can use for a variety of needs? Please explain why or why not. (n=364) Option Percent Yes 22% No 78% Noted responses from participants answering Yes : Simplicity of administration and/or cost savings Competitiveness and/or recruiting. Noted responses from participants answering No : Current system meeting employee needs Cost in adoption of a new program. Vacation Time Figure 26: Please indicate how many days an employee of your organization is allocated annually, based on the employee s tenure in whole years. (If your employee allocation is awarded in hours, please convert to days based on the typical number of hours in a workday at your organization.) (n=363) Average 25 th 50 th 75 th Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service Paid Time Off Programs and Practices WorldatWork 26

29 Figure 27: Average Number of Vacation Days Allocated Under a Traditional System 2010 and 2014 Comparison 2010 Average 2014 Average Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service Sick Time Figure 28: Please indicate how many sick days an employee of your organization is allocated annually, based on the employee s tenure in whole years. (Note: Please do not include days off paid by separate salary continuation or disability insurance plans. If your employee allocation is awarded in hours, please convert to days based on the typical number of hours in a workday at your organization.) (n=262) Average 25 th 50 th 75 th Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service In 2014, surveyed organizations reported offering a statistically significantly higher average number of vacation days for employees serving less than one year with an organization (nine) over 2010 reported averages (eight). Paid Time Off Programs and Practices WorldatWork 27

30 Figure 29: Average Number of Sick Days Allocated Under a Traditional System 2010 and 2014 Comparison 2010 Average 2014 Average Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service 9 9 Personal Days Figure 30: Please indicate how many days an employee of your organization is allocated annually, based on the employee s tenure in whole years. (Note: If your employee allocation is awarded in hours, please convert to days based on the typical number of hours in a workday at your organization.) (n=145) Average 25 th 50 th 75 th Less than one year of service years of service years of service years of service years of service years of service years of service years of service years of service In 2010, surveyed organizations reported offering a statistically significantly higher average number of sick days for employees serving one to two years with an organization (eight) over 2014 reported averages for those with traditional systems (nine). Paid Time Off Programs and Practices WorldatWork 28

31 Figure 31: Average Number of Personal Days Allocated Under a Traditional System Less than one year of service years of service 3-4 years of service 5-6 years of service 7-8 years of service 9-10 years of service years of service years of service 20+ years of service 2010 Average 2014 Average Figure 32: Method for Crediting Vacation or Personal Time Off to Employees Under a Traditional System Accrued throughout the year Yearly allocation awarded at one specific time Personal days (n=145) 21% Vacation days (n=349) 71% 0% 20% 40% 60% 80% 100% 20 In 2014, surveyed organizations reported offering a statistically significantly higher average number of personal days for employees serving less than one year with an organization (three) over 2010 reported averages (two) under a traditional system. Paid Time Off Programs and Practices WorldatWork 29

32 Figure 33: What is the method for crediting sick time to employees? (n=321) Sick Days 12% Accrued throughout the year 40% Yearly allocation awarded at one specific time 48% Sick time is unlimited, so there is no crediting to employees Figure 34: When are vacation, sick or personal days off credited to employees under a traditional system? This question only presented if Yearly allocation awarded at one specific time in Figure 33 was selected. Vacation Days Sick Days Personal Days n= Beginning of the calendar year 77% 83% 79% Anniversary date of employee 17% 3% 7% Beginning of the fiscal year, if not on a calendar year schedule 5% 11% 6% Other 1% 3% 8% Paid Time Off Programs and Practices WorldatWork 30

33 Figure 35: When do employees of your organization become eligible to use vacation, sick or personal time under the traditional system? Vacation Days Sick Days Personal Days n= As of date of hire 48% 57% 54% Beginning of next pay period 5% 6% 4% Beginning of next month 6% 6% 3% After 90 days/3 months of employment 17% 19% 21% After 6 months of employment 13% 5% 6% After 1 year of employment 5% 2% 3% After specific number of days 6% 5% 8% Figure 36: Does your organization impose a maximum on the total number of paid time off hours an employee can accumulate on vacation, sick or personal days under a traditional time off system? Vacation Days Sick Days Personal Days n= There is no maximum 15% 19% 15% One times the annual allocation for the employee 24% 35% 54% Two times the annual allocation for the employee 9% 4% 1% Maximums vary depending on tenure 17% 3% 2% Other 35% 39% 28% Commonly submitted answers under Other : Vacation days: One and one half times the annual allotted vacation time Annual allotted vacation time plus five days. An arbitrary number of hours were submitted for sick days and personal days. Paid Time Off Programs and Practices WorldatWork 31

34 Figure 37: How Unused Vacation, Sick or Personal Time is Handled at the End of Each Annual Cycle Under a Traditional System Vacation Days Sick Days Personal Days n= Forfeited 30% 48% 86% Entirely rolled over to the next year 32% 41% 8% Partially rolled over to the next year 35% 5% 2% Entirely paid out in cash 2% 4% 3% Partially paid out in cash 1% 2% 1% Entirely rolled over to a retirement vehicle 0% 0% 1% Figure 38: What options are available for eligible employees for the remaining vacation, sick or personal time balance if only a portion is rolled over to the next year or paid out in cash? (Check all that apply.) Only participants answering Partially rolled over to the next year or Partially paid out in cash in Figure 37 received this question. Vacation Days Sick Days Personal Days n= Remaining balance is forfeited 84% 75% 75% Payout in cash 5% 6% 0% Rollover to a retirement vehicle 0% 0% 0% Donate to a specific employee s paid-time-off balance, who has a qualifying need Donate to a shared balance for use by various employees with qualifying needs 0% 0% 0% 0% 0% 0% Other 13% 19% 25% Paid Time Off Programs and Practices WorldatWork 32

35 Figure 39: What options are available to eligible employees with a vacation, sick or personal time balance upon separation of employment? (Check all that apply.) Vacation Days Sick Days Personal Days n= Payout in cash 89% 4% 17% All accumulated time is forfeited 6% 88% 80% Rollover to a retirement vehicle 1% 2% 1% Donate to a specific employee s paid-time-off balance, who has a qualifying need Donate to a shared balance for use by various employees with qualifying needs 0% 0% 0% 0% 0% 0% Other 7% 7% 2% Paid Time Off Programs and Practices WorldatWork 33

36 Holidays Figure 40: Which of the following are/will be observed as paid holidays in 2014 at your organization? (Check all that apply.) Traditional System PTO Bank Unlimited Leave n= Average New Year s Day 100% 100% 100% Memorial Day 99% 99% 100% Independence Day 99% 100% 80% Thanksgiving Day 99% 100% 100% Christmas Day 99% 100% 100% Labor Day 98% 98% 100% Day after Thanksgiving 80% 76% 100% Christmas Eve 49% 45% 60% Martin Luther King Jr. Day 40% 38% 0% President s Day/Washington s Birthday 35% 38% 20% New Year s Eve 30% 22% 40% Good Friday 26% 18% 40% Veteran s Day 12% 10% 0% Columbus Day 12% 8% 0% Easter 8% 8% 40% Other 26% 26% 20% Most frequently mentioned under additional Other holidays were floating holidays and additional days surrounding the Christmas and New Year s holidays. On average, organizations offer eight paid holidays per year. Paid Time Off Programs and Practices WorldatWork 34

37 Figure 41: If your organization offers employees floating holidays that they can use when they choose, in addition to any observed, paid holidays, please indicate the number of floating holidays that are allocated per year: Traditional System PTO Bank Other Unlimited Leave We do not offer floating holidays to employees n= % 64% 55% 40% Excludes organizations that do not offer floating holidays to employees Traditional System PTO Bank Other Unlimited Leave n= One day per year 38% 49% 20% 67% Two days per year 31% 31% 20% 33% Three days per year 23% 12% 20% 0% More than three days per year 7% 6% 40% 0% Varies by employee tenure 1% 1% 0% 0% Sabbatical Leave Figure 42: Does your organization currently offer a sabbatical leave program? (n=624) 100% 86% 80% 60% 40% 20% 0% 7% 5% 2% No Yes, unpaid Yes, at full pay Yes, at partial pay Paid Time Off Programs and Practices WorldatWork 35

38 Figure 43: When do employees of your organization become eligible to take a sabbatical leave? (n=85) Only participants offering sabbatical programs in Figure 42 received this question. Specific number of years of employment 54% As of date of hire 20% Specific number of days of employment 5% Other 21% 0% 20% 40% 60% Participants selecting Specific number of years of employment commonly noted five to nine years and 10 to 15 years. Figure 44: Is there a limit to the number of sabbatical leaves an employee may take? (n=83) Only participants offering sabbatical programs in Figure 42 received this question. No 51% Yes 49% Of the 49% that impose a limit on sabbaticals, the amount varies from one every year to no more than one every 10 years. Paid Time Off Programs and Practices WorldatWork 36

39 Donation of Leave Figure 45: Does your organization allow employees to purchase or borrow additional paid leave time beyond what they are allocated? 84% 78% 16% 22% Yes Traditional (n=344) No PTO bank (n=258) Figure 46: Does your organization allow employees to donate paid leave time to other employees who may have extenuating circumstances forcing them to take an extended health or personal leave? 83% Traditional (n=346) PTO bank (n=259) 71% 29% 17% Yes No Paid Time Off Programs and Practices WorldatWork 37

40 Figure 47: If yes, is the donation made to specific employees with qualifying circumstances or to a general bank of time that is accessible to various employees with qualifying circumstances? (Check all that apply.) (n=137) Only participants allowing employees to donate paid leave time to other employees in Figure 46 received this question. Given to a specific employee 67% Given to a general bank for use by various employees 24% Employees can donate to a specific employee and/or to a general bank 12% Other 1% General Figure 48: Do you offer paid time off to part-time employees (based on the definition of part-time in your organization)? (n=619) No 26% Yes 74% Paid Time Off Programs and Practices WorldatWork 38

41 Figure 48a: Do you offer paid time off to part-time employees (based on the definition of part-time in your organization)? (n=619) 21 81% 69% 31% 19% Yes Traditional (n=345) No PTO bank (n=258) Figure 49: Is it necessary for your organization to offer a paid time off program (whether traditional or PTO-bank style) to be competitive in the labor market? (n=619) No 15% Yes 85% 21 Organizations with a PTO bank are statistically significantly more likely to offer paid time off to part-time employees (81%) over organizations with traditional systems (69%). Paid Time Off Programs and Practices WorldatWork 39

42 Figure 50: Is it necessary for your organization to offer a paid time off program (whether traditional or PTO-bank style) to be competitive in the labor market? (n=619) 83% 86% 17% 14% Yes Traditional (n=344) No PTO bank (n=259) Figure 51: Whether your organization offers a PTO bank-type or traditional paid leave program, how is the amount of paid time off allocated to part-time employees? All Systems Traditional PTO Bank n Amount of paid time off is prorated based on scheduled number of hours per week/pay period 69% 77% 59% Amount of paid time off is prorated based on actual number of hours worked per week/pay period 22% 15% 30% Same amount of paid time off is awarded/accrued to part-time employees as full-time employees 3% 4% 3% Other 6% 5% 8% Paid Time Off Programs and Practices WorldatWork 40