Use of PTO plans continues to increase

Employers continue to migrate from traditional vacation/sick plans to paid time off (PTO) plans, according to a recent survey from Mercer. The Absence and Disability Management Survey found that PTO plans are now in place in 63 percent of organizations (up from 50 percent in 2013 and 38 percent in 2010). PTO plans provide employees with more flexibility and reduce the need to determine (and track) what type of day off is being taken.

However, despite focusing on time off, employers report that many employees do not use all of the days available to them: 44 percent report that their employees take less than 80 percent of their allotted PTO time. And for the growing number of employees who work remotely, time off may not truly be time away from work. Employers are rethinking time-off program design to take into account all of these dynamics and help employees to achieve a healthier work/life balance.

Some employers –more than one in 10 respondents—have taken the step of offering unlimited vacation, at least to executives. However, most employers that have implemented unlimited vacation have found that employees take about the same time off as they were allotted previously under a standard plan.

Other types of paid leave, such as parental leave, are increasingly important as well. Generous parental leave policies implemented by a number of companies, particularly in the tech industry, were covered widely in the press and drew national attention. While for most employers, disability benefits are still the only official company-sponsored paid leave for new moms that are provided, 24 percent of employers provide paid parental leave for bonding to the birth parent.

In addition, 25 percent of employers reported providing a paid parental leave benefit to the non-birth parent. Whereas parental leave for the birth parent begins when the disability ends, parental leave for the non-birth parent usually begins upon the birth of the child. For those providing a paid parental leave benefit, the median number of weeks offered is six weeks for the birth parent and four weeks for the non-birth parent. In the vast majority of cases, the paid parental leave benefit covers 100 percent of the employee’s pay.

The survey also found the following about FMLA administration:

• More employers are choosing to outsource FMLA administration. In 2015, 40 percent of respondents outsource or co-source FMLA, up from 38 percent in 2013.
• Improving FMLA administration and reducing the impact of absence on operations are respondents’ top priorities for their absence and disability programs (cited by 44 percent and 42 percent, respectively).
• Nearly two-thirds of respondents (65 percent) have experienced an increase in leave requests over the past two to three years, and about a third reported an increase in the number of ADAAA leave accommodation requests (32 percent).

SOURCE: Mercer press release, November 28, 2016.

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