All Work and No Pay: The Impact of Forfeited Time Off

Executive Summary

The storied American work ethic suggests that taking a pass on time off is a matter of tradition—but that’s not true. For decades, Americans took advantage of the time off they had earned. That’s no longer the case. The number of annual vacation days American workers use has steadily declined over the past two decades.

All Work, No Pay found that the average American earns 21 days of PTO each year but uses only 77 percent of that time, forfeiting 4.9 days. While many employees have the option to roll over unused PTO into the next year, bank it for future use, or be paid for the unused time, one-in-four (23%) permanently lose it at the end of the year. Less than half (47%) of employees are able to roll over days into the following year and nearly a third (30%) of these employees are able to roll over five days or less.

The result?  A PTO graveyard filled with unused vacation time. American workers lost a total of 169 million PTO days in 2013—1.6 per employee. These days could not be rolled over, could not be paid out, were not banked or used for any other benefit—they were purely lost.

The value of one forgone day, where workers are de facto volunteers for their employers, totals an average of $504 per employee.  Therefore, the value of those 169 million lost days is significant—$52.4 billion in forfeited benefits. That’s more than the total wage and salary income of several U.S. states—Nevada, Arkansas, Mississippi and New Mexico, to name a few. 

Methodology

Oxford Economics’ analysis is based on the Monthly Current Population Survey results reported by the U.S. Bureau of Labor Statistics (BLS) and a June 2014 survey of 1,303 American workers conducted by GfK Public Affairs and Corporate Communications in conjunction with Oxford Economics. The BLS data compiles long-term vacation activity, while the GfK results indicate average vacation days taken. By combining the two data sources, Oxford Economics determined long-term, historical vacation activity among American workers.

Impact on Career Success

The Work Martyr Complex thrives on face time and fear—and it’s not helping American workers get ahead. Oxford’s analysis finds that there is no link between putting in more time at the office and getting a pay raise or bonus. In fact, employees who left 11-15 days of PTO unused last year are actually less likely (6.5% less likely) to have received a raise or bonus in the past three years than those who used all of their PTO.

The only thing employees gain by being tied to the office is stress. There was a clear correlation between those who have more unused PTO days and those who reported feeling “very” or “extremely” stressed at work, particularly for those employees who leave more than 11 days unused. 

Note: Project: Time Off recently released new research that updates some of the facts and figures in this resource. See how they’ve changed in our new report, The State of American Vacation.