Paid Time Off Practices Around The World

May 22, 2019
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Paid time off from work is an integral part of compensation that employers offer to their workers. Today, companies use it as one of the crucial benefits to attract and retain talented workforce: for most employees, both in manual labor or knowledge-based work, free time is one of the most valuable assets.

Many studies have shown that employees who regularly take time off are more productive at work than their burnt out colleagues who don’t use their vacation time for years. That’s why HR specialists and managers tend to create paid time-off policies that encourage employees to use their earned vacation.

While in the past multiple time-off calculations have been used (vacation balance, sick time off balance, etc.), today businesses move towards the single paid time-off (PTO) bank that employees can use for any absences they need: vacations, sick days, family care, etc.

Time-off practices and approaches differ by region and country, as in most countries, the number of paid days an employee can take off from work is defined by law. Companies are obliged to include it in their compensation packages, and non-compliance with labor law not only costs money – it also damages company’s reputation and prevents qualified specialists from accepting their job offers.

Paid vacation

In most advanced economies, the amount of paid leave time is defined in labor law. Usually combined with national or regional public holidays, the resulting amount varies significantly around the world, reaching up to 35-40 days of leave per year.

European countries’ laws guarantee the biggest number of vacation days and public holidays: the average total number of days off that a full-time worker is entitled to exceeds 30 days per year. Japanese laws require an average of 25 paid leave days a year – depending on years of service. In Germany and Canada, regional legal provisions apply, so the number of paid days off varies across the nation.

The only exception among the advanced economies is the US, where employers are not required to offer their employees any paid vacation. Many companies still offer vacation packages of different levels of generosity to their employees. However, the absence of legal regulation results in using paid vacation time for other purposes. For example, it’s not uncommon that an employer requiring their employees to use vacation day when their workplace is closed due to weather conditions.

The lack of legal requirement to provide paid vacation also invites US employers to implement “use it or lose it” policies: if an employee doesn’t take their earned paid vacation, employer not only doesn’t transfer it to the next accrual period, but also denies payment of accrued and unused vacation time –however, this can have legal consequences depending on what specific employment contract states.

Paid sick leave

In the US, there’s no federal law requiring employers to provide paid sick leaves to their employees. The only requirement is providing medical leave (not necessarily paid) that applies to employers of 50 and more. Paid leaves are regulated at the state level: seven states have laws requiring from three to five paid sick days, depending on company size.

In European countries, employees’ right to sick pay is protected by law. All EU members require businesses to compensate their workers’ income loss due to sickness. The number of days an employee is entitled to get paid for varies from country to country. For example, German employees can benefit from up to six weeks of full compensation, after which they receive 70% of their salary until full recovery.

In some countries, “qualifying days” are applied in the beginning of the sick leave period. For example, in the United Kingdom and France, the first three days of a sick leave are “qualifying days” where an employee doesn’t receive compensation. After that, partial compensation is applied. The longest unpaid “waiting” period is in Ireland, where it amounts to six days and to be qualified for paid sick leave you need to accrue 104 weeks of social insurance contributions.

In other parts of the world, paid sick leave practices are sometimes completely different. In Japan, famous for its “if you can walk, you can work” culture, employees have to use their annual vacation days if they are sick – or take unpaid leave and lose money. Paid sick leave is only offered by some foreign companies as a special benefit.

The truth is, Japanese government does offer workers some support in case of a serious illness or an injury that involves hospitalization on a prolonged period of time. In that case, an employee can apply for the Injury and Sickness Allowance. It provides workers with up to 66% of their regular salary over the absence period of up to 18 months. However, many Japanese companies don’t want this information to be shared, so you’re unlikely to learn about this option from orientation materials at your workplace.

Paid parental leave

While maternity leaves have been a reality of work compensation packages already for decades, parental leaves for both female and male coworkers are quite new. In most industrialized countries, law requires employers to provide a specific number of paid weeks off before and after birth, or after adoption.

Again, the US is the only exception here, joining Lesotho, Swaziland and Papua New Guinea as the only countries in the world that don’t mandate paid maternity leave. The American Family and Medical Leave Act (FMLA) only provides 12 weeks of unpaid leaves for new mothers. That said, only 16% of the US employers offer fully paid maternity leave as an additional compensation benefit.

In Europe, this type of leave is regulated by the Parental Leave Directive 2010 that defines parents’ rights to time off from work and requires a minimum of four months to care for children under eight.

Mostly, the number of parental leave days in European countries amounts to around 100 and is fully paid – sometimes it’s just maternity leave like in Germany and the Netherlands, and sometimes paternity leave is required too, like in Spain or France. Eastern European countries, like Bulgaria, Croatia, Russia, mandate even more days of 100% paid leave. One of the most generous policies is provided by the UK, with its 240 days of maternity and paternity leave and 90% pay.

Summary

It seems to be a proven fact today that paid vacations and the ability to take a sick leave without losing money are important motivators for employees. What’s more, paid vacation policies ensure overall well-being of the workforce, which increases productivity levels. In the most countries of the industrialized world, paid time off from work is legally required on the national level. However, even if the law does not mandate it, companies themselves, realizing the importance of this benefit, include it in their compensation packages.
Paid Time Off Practices Around The World
Source: HR.com Articles

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