More Vacation Time to be Left on the Table in ’06

By Staff Report

Aug. 20, 2006

Employees in the United States may value vacations in theory—planning for them, negotiating for extra days when they’re hired—but in actual practice do the unthinkable: They forfeit paid time off.

Workers here already earn shorter vacations compared with those in other Western countries—14 days annually versus 24 in Great Britain, 27 in Germany and 39 in France. Now comes this surprising finding: On average last year, U.S. workers gave back three days, compared with one or two days in other Western countries. This year, entitled to two additional days, they’re expected to leave four unused, according to a survey conducted by Harris Interactive and Ipsos Reid for Expedia, the online travel agency.

The survey noted that workers in Western states spend the most time on the job: 41 percent don’t take all their vacation, compared with 33 percent nationally. Those workers give up an average of seven days. Overall, 574 million days of unused vacation will total an estimated $75.7 billion in wages this year. Expedia calls the trend toward “overworked, vacation-deprived” workers unsustainable.

Shortened vacations diminish revenue because overwrought employees lose productivity, says Gregg Lemley, a labor and employment attorney. “Vacation is a two-way street. It’s a benefit to employees to recharge their batteries. But it’s also a benefit to employers. They want employees well rested, ready to do their jobs mentally and physically.”

Lemley, who’s in the St. Louis office of international law firm Bryan Cave, doesn’t believe employers fuel the trend. “What we have is a generation of people who believe that work is paramount to the point it’s not healthy.”

Simple fear may also play a role. “American workers are overloaded and afraid that if they don’t give back some vacation, they might lose their jobs or promotions,” says D. Quinn Mills, professor of business administration at Harvard Business School and author of Having It All … And Making It Work: Six Steps for Putting Both Your Career and Your Family First.

Among the reasons workers relinquish vacation days are the need to schedule them in advance (14 percent), workload (11 percent) and the prospect of being paid for unused days (10 percent), though expectations of a payout may be misguided. States often regulate vacation policies, and while some have use-it-or-lose-it laws, most do not, Lemley says.

Occasionally, even in states that allow it, companies without well-drafted vacation policies can wind up paying almost a year’s salary upon an employee’s termination or retirement, Lemley says. Well-drafted policies are those that clearly state vacations must be taken in the year they’re accrued.

The survey didn’t ask respondents where they worked, but Lemley sees a growing number of industries, especially in emerging fields like technology, advocating vacations. “The reality of the situation is that you’re ultimately going to get more production and better work,” he says.

One challenge remains, however: Employees need to actually relax on vacation. Twenty-three percent check business voice mail or e-mail during that time, and 65 percent say they experience work-related stress—even though they’re off the clock.

Betty Liddick

Schedule, engage, and pay your staff in one system with