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Traditional Paid Leave Plans Used at Half of U.S. Companies

Traditional paid leave programs are still a mainstay at many organizations.

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This was a main finding in XpertHR’s “2020 Employee Benefits Survey,” which revealed that 49% of the 457 United States employers surveyed utilize this traditional approach where all leave is in separate categories, such as “sick” and “vacation.” Comparatively, 44% of employer said they offer a paid time off (PTO) plan where all or most leave is in a single PTO bank.

“Choosing between a traditional or PTO leave system is always an important challenge for employers, but this choice has taken on added significance due to COVID-19,” said Andrew Hellwege, surveys editor at XpertHR. “When setting up paid leave benefits — whether it be a traditional or PTO plan — employers should carefully consider how their plan protects employee and public health, as well as ensure it complies with any potential changes in leave legislation spurred by the pandemic.”

WorldatWork’s “2019 Inventory of Total Rewards Programs & Practices” survey found that 50% of companies offer a PTO bank, which combines vacation and sick leave, while 55% offer vacation separate and 56% offer sick leave separate.

XpertHR’s survey also covered a variety of health insurance plans and found that preferred provider organization (PPO) plans are the most popular option, with 69% of employers providing this type of plan, while 46% of employer offer high deductible health plans (HDHPs).

The survey report examined the retirement landscape as well, another issue highlighted by the coronavirus pandemic as many employees’ investments have been battered by fluctuating markets. Among the several retirement plans covered by the survey, traditional 401(k) plans are the most popular, offered by 66% of responding organizations, followed by Roth 401(k)s (38%), and traditional pensions (11%). 

“Clearly, modern retirement options focus on savings and investment outcomes, as pensions are a shadow of their former selves,” Hellwege said. “But, with two major economic downturns in roughly a 10-year period, employers may want to consider bolstering the financial security of their retirement plans — perhaps by offering increased employer contributions — to help shield workers’ retirement savings from market volatility.”

Among other benefits organizations offer, employee assistance programs (EAPs) were found to be the most popular, as they are offered by 65% of organizations. Notably, while 41% of organizations provide some form of tuition reimbursement or assistance, the survey found that just 3% provide student loan repayment.

This figure is slightly lower than what was found in WorldatWork’s survey, which revealed that 9% of employers offered student loan debt repayment in 2019. What’s more, a Willis Towers Watson survey found that 32% of employers plan to make contributions to their employees’ student loans by 2021.


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