Some employers give vacation time only to full-time employees. Others grant it to all employees. Still others offer prorated vacation leave based on the employee’s work schedule and employment status. Review information on when employees are eligible for paid vacation, how many days off employers provide, and pay for unused vacation.
Who Gets Vacation Pay
Employers aren’t required to give employees vacation leave or to pay for it if they do offer it. Federal law does not provide for vacation pay. The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick time, or holidays. Therefore, employees are not legally entitled to paid vacation time or paid holidays off from work. Vacation pay is based on an agreement between an employer and an employee, either a collective bargaining agreement, company policy, or an employment contract. If you are entitled to receive vacation pay, the agreement or company policy will determine how much you will get.
Company Vacation Policies
The amount of vacation time any employee receives is determined by company policy, collective bargaining agreements, or even, especially in small companies, an informal agreement between an employee and management. There are some rules that apply, however. When employers do offer vacation leave, it has to be offered equitably. Companies can’t discriminate based on race, gender, religion, or other protected characteristics when giving time off from work.
Organizations That Offer Paid Vacation
Private Industry Employers
According to the Bureau of Labor Statistics (BLS), in 2021, paid vacation leave was available to 92% of private industry employees at the largest companies. Of those working for the smallest private industry employers, 71% had paid vacation. Almost all employees in finance and manufacturing (95%) had access to paid vacation leave. More than three-quarters of workers in construction (82%), education and health services (82%), professional and business services (81%), and trade, transportation, and utilities (81%) received paid vacation. But less than half the employees in leisure and hospitality occupations (43%) had access to paid vacation leave.
Government Employers
About 63% of state and local government workers had access to paid vacation leave in 2021.
Average Number of Paid Vacation Days
Vacation time earned by employees varies with the length of time they have worked for their employer. The BLS reports the following:
34% of workers with one year of service receive 10-14 days of paid vacation.32% of employees with five years of service receive 15-19 days of paid 33% of employees with 10 years of service receive 15-19 days of paid 29% of employees with 20 years of service receive 20-24 days of paid
The Society for Human Resource Management (SHRM) 2022 Employee Benefits Survey reports that 99% of employers offered paid vacation leave, 67% offered paid time off (PTO) (which includes both vacation and sick leave), and 6% of employers provided paid unlimited leave.
Paid Vacation vs. Paid Time Off (PTO)
What is PTO?
Some employers combine vacation time with personal days and sick time to provide a total number of days of paid time off (PTO) from work. PTO is leave time that can be used for any reason, such as vacation, personal illness, family illness, or other personal reasons. These plans offer employees flexibility in how they choose to use their time off.
Average Amount of PTO
The amount of time off provided in PTO plans varies based on the employer. A WorldatWork Survey reports that the average number of paid time off days ranged from 18 days with one year of service to 29 days with over 20 years of service. SHRM reports that the average number of leave days based on length of service ranged from 13 to 26 days per year for PTO plans.
How Vacation Time Accrues
Company policy determines how employees earn vacation time. Some companies provide vacation leave or PTO that accrues on a monthly basis or is based on a certain number of hours worked. For example, employees may receive one day per month or eight hours of leave that they can take off for any reason. Other companies provide vacation days based on years of service. In this case, the employee could be provided with a week for every year of service, up to a maximum number of weeks. If vacation leave is based on years of service, the employee is usually eligible to take it after they have worked for a year. The amount of time off earned depends on company policy or the terms of a collective bargaining agreement for covered workers.
Pay for Unused Vacation Time
Depending on company policy, employees may be required to use their vacation during a specific time period, which is known as a “use-it-or-lose-it policy,” or they may be able to carry unused vacation or PTO over to future years. If the company does allow vacation days to be accrued, there may be limits to how much time can be carried over, and there may be a deadline for using the carried-over vacation days.
How To Check Your Vacation Status
When a company is offering you a job, they should let you know how much vacation you are entitled to and when you can start taking it. If you haven’t been informed, check with the human resources department or with the person who offered you the job. That way, you will know upfront how much time you will be able to take off from work. If you’re already working, check with human resources for clarification of your vacation status. (The information may also be available on the company website.)
Tips for Negotiating Vacation
If the company doesn’t offer vacation time, you may be able to negotiate with your employer to take a certain number of days off. This would most likely be unpaid time off from work. In addition, if you do receive paid vacation, you may be able to negotiate extra time off, on an unpaid basis, if your employer is flexible. There are no guarantees, of course, but sometimes it can’t hurt to put in a request if you are a well-respected employee.
Laws Regulating Vacation
There are no federal laws regulating vacation. However, depending on the state in which you reside, employees may have to be paid for unused vacation time.
