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PTO: Understanding American Vacation Culture

It’s early July and I’m in Austria for work engagements and family visits. Summer is in the air and one topic dominates all conversations: vacation. Having lived in the US for many years, I cannot help but notice the contrast: vacation is a much bigger focus in Austria this time of the year than it is in the US. Why is that?


Read on to learn more about the complicated relationship Americans have with vacation. Understanding it is essential for anyone looking to work or do business in the US.

A calendar with the word "vacation" scribbled on a few days.

Content:


In the US, Summer and Vacation Don't go Hand in Hand.

 

For most Austrian employees, and many others across Europe, vacation is a fixed part of summer. According to this article in the Austrian newspaper “Der Standard”, 95% of Austrians are planning a summer vacation, often between 8 and 14 days long.

 

In the US, things are a bit different. Taking eight, ten, or even 14 days off during the summer months is not the norm. For many people, vacation is not top of mind. There are several explanations for that.

 

First, many employees simply don’t have enough PTO to do so.


What’s PTO?

 

PTO stands for “paid time off”. It refers to an all-inclusive time-off package that gives employees a certain number of hours or days per year they can stay away from work and continue to get paid. Employees can decide how to use this time: for vacation, when they get sick, or for other personal and family needs. They don’t have to inform their employer how they use it.

 

PTO is a growing trend. The majority of US companies who offer their employees time off have a PTO policy.


Do All American Employees Get PTO?

 

No. Paid time off is a benefit an employer can offer their employees – but doesn’t have to.

 

There is no federal law that tells business owners that they have to give their employees paid time off (or vacation time or sick days).

 

On the state level, there is some variation. About half US states have some PTO requirements in place. In some cases, PTO is only mandatory for jury duty. In others, it’s only for a small number of sick days. Yet in others, you accumulate PTO slowly in hourly or daily increments.


In almost half of US states, such as in Florida, my home state, businesses do not need to give their employees any PTO.


How Much PTO Does the Average American Employee Get?

 

A recent article in Forbes provides some insightful numbers:

 

Nearly a third (31%) of US employees do not have access to PTO.

Based on the table below, the average PTO depends on years of service. After 5 years in an organization, for example, the average would be 12 days off.



Average PTO also depends on industry, age, and region. People in the Northwest tend to get slightly more PTO than people in other regions, like the Midwest and the Southeast.


Are Holidays Paid Time Off?


On average, US employees receive 7.6 paid holidays. Even though the US recognizes 12 federal holidays, these do not automatically mean paid time off. Below is a list of US federal holidays.


Graph of US Federal Holidays

Do Americans Use up All Their PTO?

 

As a result of the limited paid time available, many Americans need to be mindful how they spend it. Imagine having only 10 or 15 days of PTO. It’s not wise to spend it on a two-week summer vacation, because you may need to take time off for sickness. It is also more common for employees to work when sick, as people reserve their paid time for "severe" situations.


But here's another interesting fact: Even though PTO is not high, many people don’t even take the time they are allowed to. Look at the following numbers from the Forbes article.

 

  • 55% of Americans are still not using all their paid time off.

  • Over 765 million vacation days have gone unused by Americans.

  • Over half (52%) of employees report working while on PTO. Some check their emails, some have conference calls, and some put in hours of work.


An Extreme Change: Unlimited Vacation Time

 

There is a new trend that may seem extreme in the light of what we just talked about: unlimited PTO.

 

At the moment, only 4% of companies offer this benefit. These are mostly found in the tech, media, and finance industry. However, job postings with unlimited PTO have risen 178%.

 

But here’s the crazy thing: On average, employees with unlimited PTO only take 10 days off. That is less than those with a limited number of PTO days. Just because an employee has the option to take as much time off as they want doesn’t mean they will actually do so. Some workers may be hesitant to take more time because they don’t want to seem like they’re abusing the privilege.

 

42% of those with unlimited PTO work on vacation.


Why are Americans Reluctant to Take Vacation?

 

We now know that more than half of Americans don’t use up their PTO, even though it is generally a lot less generous than in many other countries. Here are some probable explanations:

 

Workload and Lean staffing

Some employees may simply have too much work. There is no one else who can take over some of their tasks. The fear of returning to a mountain of work left undone keeps them behind their desks and at their work stations.

 

Fear and Pressure

Fear of missing out and losing out on future opportunities, but also fear of being seen as replaceable. If you’re gone for two weeks and business continues without you, then you may be putting your position in danger.

 

A boss may make you feel uncomfortable for taking vacation. In some cases, pressure can also come from colleagues, especially if you work in a highly competitive environment. Many younger people say that they are nervous when they have to ask for time off.

 

Culture and Perception

The long history of no federally mandated vacation time has created a culture where working a lot is seen as a badge of honor. When you choose your job over vacation it shows dedication – to management but also to your colleagues. On the other hand, taking time off may be seen as laziness, lack of dedication, or lack of job satisfaction.

 

Combined with other cultural values, such as competitiveness, goal-drivenness, and the desire to realize the American Dream, has created a system where taking time off is seen as quitting or not having high work ethic. There is stigma attached to the idea of not working, even if it's just for a short period of time.


What are the Latest Vacation Trends in the US?

 

Here are a few interesting trends from the 2023 Vacation Confidence Index established by Allianz Partners. All numbers refer to 2023.

 

Importance of Vacation: 

74% of Americans think that annual vacations are important. That attitude has changed considerably since the Pandemic.


Woman sitting in a lounge chair on the beach working on her laptop.

Length of Vacation: 

The average summer trip length is expected to grow to 4.5 nights.


Micro-cation:

Many Americans plan to take a short trip of one night. In the summertime, short vacation is often organized around the federal holidays of Independence Day (4th of July) and Labor Day (first Monday in September).


Pay-cation:

3 in 10 Americans will choose to work remotely from a vacation destination (in 2023). For 18 to 34-year-olds, this number is 42%. In some cases, people also take time off without formally requesting it, a trend that is also called "quiet vacationing". Just like pay-cation, this trend is more pronounced among Millennials and Gen Z.


Final Tip: Develop Cross-Cultural Holiday Awareness


If you operate internationally and have partners, clients, or colleagues in/from other cultures, make an effort to find out about their holidays, if they celebrate them, and how it may impact day-to-day business. This applies to all sides involved. I would advise against scheduling meetings or deadlines on important holidays whenever possible - simply out of respect for their culture and customs.


In the US, the top holidays (apart from Christmas Day and New Year's Day) are Memorial Day in May, Independence Day in July, Labor Day in September, and Thanksgiving Day in November. Many Americans do not work on these days and spend them with their families and friends. Showing some knowledge about the existence and background of these holidays is a great way to build trust and establish good relationships.


Furthermore, showing sensitivity to how you and your staff talk about your vacation time and availability can help shape a positive perception and create a constructive work climate.


I hope these numbers and insights have given you a better understanding of US vacation culture. Understanding the country and people you want to do business with or relocate to for professional reasons is crucial for success.


Contact me if you want to dive deeper into the American mindset and culture. I have lived and worked in the US for many years and would love to share my expertise with you so you can be successful!



 


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