Paid Vacation Essay

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Paid   vacation   time   is  an   employment   benefit offered  by employees  to  workers,  allowing  them to take a certain amount of hours or days off each year, to use in any manner  they choose while still receiving a salary. Many countries  have labor laws that   require   employers   to  grant   paid   vacation time,  while  other  countries,  such  as  the  United States, leave this decision to the discretion of employers.   Even   when   paid   vacation    is  not required   by  law,  many  employers  offer  it  as  a benefit, to help them hire and retain quality employees.  Where  paid  vacation   is  available,  it must usually be requested in advance, and the employer has some discretion  over whether  or not to grant requests. Business will sometimes have blackout periods  during  which paid vacation  may not  be  used,  as  in  when  retailers  in  the  United States, preparing for the holiday  shopping  rush in December, do not allow vacations until after Christmas. It is also not uncommon for employers in  the  United  States  to  limit  the  benefit  of paid vacation  to certain  categories  of employees,  such as full-time workers.

In the United  States, the issue of paid  vacation was  first  raised   in  the  early  part   of  the  20th century,  when  President  Taft  announced his view that  every citizen of the country  should  have 2 to 3 months  of time off per year, as a means of avoiding burnout and preserving the health of the workforce. This  initiative  was  not  implemented in the United  States because  of resistance  from  business interests,  but  several European countries  adopted expansive  vacation  policies that  persist  up  to  the present  time,  offering  an  average  of  7  weeks  of paid leave each year.

Accumulating Vacation

Because employers in the United States are not required to provide paid vacation, those who do provide  it are free to allocate  it in whatever  manner  they  see fit, provided  they  do  not  do  so in a discriminatory fashion.  Most  employers  have systems whereby employees start working for the employer  with  a  base  amount of  paid  vacation, and  then  additional paid  time  off (PTO)  may  be  earned  and added  to this the longer the employee stays with the company.  There is usually an upper   limit  or “cap” on  this amount, so that  long-term employees   will  reach   a  maximum  amount  of annual  paid  vacation;  if they earn  more  vacation days beyond this limit, the days are “lost.” Employees  in  this  situation sometimes  use  their vacation  days to avoid “losing” them.

Some states have additional requirements addressing the accumulation of paid vacation  time. One restriction frequently imposed forbids employers from  taking  away  vacation  that  has not  been used  by a given deadline;  the  reasoning  in these situations is that employers are not allowed to take away salary from employees, and paid vacation  is a form of compensation not significantly  different from salary. Similar issues arise when an employee leaves the  company  while  having  an  unused  balance of paid vacation. Some states require the company   to  convert  this  unused  vacation   to  its cash  value  (using  the  employee’s  hourly  rate  of pay) and  pay this amount to the employee;  other states  lack  such  provisions, so the  employee  will lose the  unused  vacation  after  leaving  his or  her employment  (many  people  in this situation try to use  up   their   remaining   vacation   before   giving notice to their employer).

Shift To PTO

In recent years, employers in the United States have begun to change  the way they offer paid vacation time. Traditionally, employees received different types of paid leave, each intended  for different purposes:  Sick leave was  used  for  illnesses, vacation time was for rest and relaxation, and personal  time was to care for family members  or address  other personal  or family issues. This would  occasionally present problems  because these leave periods  were intended  to remain  separate,  so employers  usually did not have the option  of converting  one type of leave  into   another.  This   would   mean   that   an employee who had used all of her sick leave would be unable  to take  additional time off if she broke her leg, even if she still had a large amount of vacation time saved up. This type of system could also incentivize sick employees to come to work despite their illness in order to avoid using sick leave, possibly spreading  the illness to other  employees  and detrimentally affecting office productivity.

As an alternative, some businesses offer PTO as a single pool of paid leave days that employees can use for whatever  reason. Instead of having to budget time taken off in each of several categories, employees  have  a  lump  sum  of  PTO,  making  it easier for both employees and employers to administer. Critics of the new system, however, warn that some  employers  are  finding  ways  to  reduce  the total amount of paid leave allowed during the process of consolidating their legacy policies into new PTO policies.

Opposing  Views

Ever since paid vacation entered the national conversation in the  early  1900s,  there  have  been vigorous arguments for and against a national requirement for  paid  vacation.  Those  in favor  of such  a  requirement point  to  a  large  number   of studies showing that citizens in countries with mandatory paid  vacation  are  more  productive  at work,  suffer  fewer  health  problems,   live  longer, and have higher overall  levels of satisfaction with their  lives  than  U.S. citizens.  Advocates  of  paid vacation  also argue that contrary to the suggestion that the productivity of the nation  would decline if paid  vacation  were made  more  accessible, leisure industries  across the country  would  experience  an unprecedented period  of  growth  in  spending  on tourism,  recreational equipment, hotels, airline flights, rental  cars, restaurants, and other  vacation expenses.

The parties opposed  to federally mandated paid vacation  tend to be businesses  and other  employers that  fear the expense  and  loss of productivity that, they say, would  accompany such a huge shift in   employment    policy.   Some   opponents  also suggest  that   if  the  government were  to  impose such  a  requirement, it  would  be  an  unconstitutional   infringement  on  the  rights  of  businesses to conduct  their affairs in the way that  seems best to them.

The  latest  experiment related  to  paid  vacation throws  both  sides of the argument into confusion. As companies  move toward offering a unified pool of PTO days, a small number  of firms are placing no  limits  on  the  number  of PTO  days  employees may use. These policies are referred  to as “endless summer” plans, and the results of their availability have  been  surprising.  The  natural expectation of business  leaders  and skeptics was that  such a system  would  begin  to  be abused  as soon  as it was implemented. To the surprise  of many,  companies that began offering unlimited PTO observed that employees were using it responsibly. Many employees explained  that  they did this out of concern  for their  coworkers, not  wanting   to  unduly  burden them,  and  to  avoid  developing   a  reputation as unreliable   or  lazy.  More   study   of  the  issue  is needed  to  determine  whether  removing  limits  on paid  vacation  in this manner  will truly  be a self-regulating  system in which workers  have the freedom to take the time they need, but enough  social incentive to prevent them from abusing the system. It is possible  that  the system will fall out  of equilibrium, with workers  either taking  too much time because of the lack of controls,  or taking  too little for fear of how they may be perceived.


  1. Bennett, James T. and Bruce E. Kaufman. What  Do Unions Do? A Twenty-Year Perspective. New Brunswick, NJ: Transaction Publishers, 2007.
  2. Berlatsky, Noah. Workers’  Detroit, MI: Greenhaven Press, 2012.
  3. Cascio, Wayne F. and John W. Boudreau. Investing  in People: Financial Impact  of Human Resource Initiatives.  Upper Saddle River, NJ: FT Press, 2008.
  4. Schulte, Brigid. Overwhelmed: Work, Love, and Play When No  One  Has the Time. New York: Sarah Crichton Books, Farrar,  Straus and Giroux, 2014.

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