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  1. Blog
  2. Paid Time Off

How Paid Time Off (PTO) Policy Works

The U.S. is woefully behind the rest of the world when it comes to guaranteed paid time off for workers

beach filled with same umbrella as people vacation with paid time off

By Abbey Slattery

Everybody needs to take a day off now and then. After all, we’re not robots (at least not yet), and a little time away from work is healthy.

It’s likely that your company offers some form of PTO—or paid time off—that allows you the freedom to get away from work without missing out on the money. But the United States lags the rest of the world's advanced economies by not offering as much paid time off as other countries. And because of pressure from their companies or feeling guilty, more than half of U.S. workers who have PTO don't take all of it

We’ll address the difference between paid time off and vacation, who gets it, and the future of PTO.

How is paid time off different from vacation?

Basically, vacation is PTO, but PTO isn’t necessarily vacation.

Paid time off is exactly what it sounds like: time off from work that you still get paid for. You probably already knew that, but you might be asking yourself: wait, isn’t that just vacation? Sort of. Paid time off is a blanket term that covers a variety reasons for needing time off, like sick days, mental health days, holidays, and so on.

One of the many benefits of some PTO policies is that you don’t have to make up excuses for not coming into work. Instead, it’s a system that allows you to be treated like a responsible adult who can take time off without having to be sick or on a tropical island.

Common paid time off (PTO) policies

The exact amount of PTO you get depends on a variety of factors, like your company’s policies and the duration of your employment. According to a recent report from workplace stats firm Zippia, the average number of PTO days for Americans working in the private sector breaks down like this:

  • After one year of work: 10 days

  • After five years of work: 15 days

  • After ten years of work: 17 days

Those numbers vary, of course, and sometimes companies trade off more PTO with other benefits, like flexible work days or paid lunch breaks.

Saving up your time for a multi-week vacation? Check with your company beforehand to see what accrual policy they offer. Some employers provide rollover PTO at the beginning of the year, some scale accrued time off based on the total amount of hours worked, and some just have a number set in stone.

So, everyone gets some form of PTO, right?

In an ideal world, yes. But the United States is actually the only advanced economy—and one of the only fourteen countries—in the entire world that doesn’t guarantee PTO for all workers. In fact, as many as one in four American workers don’t get PTO. Compare that to other countries:

  • Brazil (30 days after one year of employment)

  • Spain (30 days yearly)

  • Australia (4-5 weeks yearly)

  • Denmark (25 days yearly)

  • And the UK (28 days yearly)

And PTO in the U.S. starts to look a little grim. Additionally, PTO gets more disproportionate as wages vary. In the bottom fourth of earners, about 49 percent of workers don’t receive any PTO. Compare that to the top fourth of earners, where 90 percent of workers get PTO, and again: yikes.

Why paid time off matters

While 15 to 16 days off seems small in the grand scheme of things, it ends up being spot-on for Americans—in 2015, workers took an average of 16 days off. Are people taking less time off because they want to be working more, or are people working more because they’re given fewer days off?

It’s tough to speak to those questions with data points, but more PTO is a great draw for employers. In fact, it’s the number-one predictor for women’s overall job satisfaction, beating out even salary satisfaction. It also helps prevent worker burnout, boosts productivity levels, and generally keeps employees healthier.

The future of paid time off

While the United States is behind the rest of the world when it comes to PTO policies, employers’ policies are slowly improving.

Larger companies like HubSpot (4.3 stars), Grubhub (4.3 stars), and Netflix (3.9 stars) are setting a new standard by adopting unlimited PTO policies, which allow workers more freedom and autonomy—though no paid time off policy is truly unlimited.

Right now, only about 4 percent of employers in the U.S. offer unlimited PTO, though it’s expected that that number will increase as employers use liberal paid time off packages to compete for top talent.

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