Mandatory vacations from work may soon become the norm.

• Fewer than one in ten workers across the country are mandated by law or regulation to take a minimum amount of vacation.
• According to a Harris Poll survey, 78% of Americans do not utilize the full amount of paid time off provided by their employer.
• To combat high employee stress and burnout, some companies are considering mandating vacation time, even if it means shutting down the entire office.

To combat burnout among employees, some employers are exploring options such as mandated vacations and complete office shutdowns.

A 2024 report by the International Foundation of Employee Benefit Plans found that only 8.7% of employers require workers to take a minimum amount of vacation, with some of this being for legal or regulatory reasons. Despite this, employers are increasingly concerned with encouraging employees to take time off, said Julie Stich, vice president of content at the International Foundation of Employee Benefit Plans.

Nearly half of Americans are not utilizing the full amount of paid time off provided by their employers, according to a recent Harris Poll survey. On average, workers took only 15 paid days off last year, despite being entitled to more by their employers.

A 2023 survey by Eagle Hill Consulting found that 45% of American employees experience burnout at work, with higher rates among younger workers (52%) and women (48%).

"There is currently more debate about mandatory time off than in previous years. Many companies are reporting that employees are not taking enough time off," Stich stated.

Companies and employees must consider these challenges.

Tracking vacation usage and employee mindset

Understanding the company's baseline is crucial, according to Wende Smith, head of people operations at BambooHR. This can help companies identify a plan for progress. Is the issue specific to a department or is it more widespread?

Understanding your problem requires tracking it, according to Smith.

It's crucial to tackle the root causes of employees' inability to take time off before implementing broad policy changes.

According to the International Foundation of Employee Benefit Plans' survey, employees face challenges such as heavy workload, inadequate staffing, and coordinating time off with other staff members.

To encourage employees to take time off, employers must communicate with them, understand their reasons for not taking vacations, and address them. Additionally, leaders should set a positive example by taking vacations themselves, Smith advised.

When employees go on vacation, it's important to respect their time off and not constantly message them.

Mandatory paid leave pros and cons

Certain jobs, such as pilots, air traffic controllers, trucking, and finance roles, may have mandatory time off by law or industry best practice, according to Stich. However, other industries may have more flexibility when it comes to setting these policies. While mandatory policies can be beneficial in forcing the issue of vacation, there can be challenges, including employee pushback and enforcement, said Jonathan Gove, senior executive advisor at Eagle Hill Consulting.

Kate Derby, West region practice lead for the absence, disability management and life specialty practice at WTW, stated that some individuals may view vacation time as a savings account, particularly if they receive payment upon termination.

If an employer wants to implement mandatory time-off policies, they must determine the number of days required and whether to use blackout periods. For instance, an accountant's tax season may require a blackout period, while a pediatric office may need an all-hands-on-deck approach three weeks before school.

Stich suggested that companies require employees to inform their manager of the week they intend to take off by a specific date, or else the manager must collaborate with the employee to determine the time off.

Employers must be prepared to handle complaints about fairness in scheduling prime weeks, as stated by Mary Will, deputy general counsel and partner at Faegre Drinker.

Federal, state and local law

While there is no federal law mandating paid time-off, some state and local laws do apply. These laws vary by state, making it complex to address with a mandatory vacation policy. Jill Kahn Marshall, an employment and labor attorney and partner at Reavis Page Jump, advises businesses to consult with an attorney before implementing a new policy to avoid violating any state and local laws.

Methods to encourage more time off from work

Instead of focusing on mandatory time off, some companies are exploring less administratively burdensome and employee-friendly alternatives. For instance, many high-tech companies in California have adopted shut-downs, which typically occur during the week of July 4th or between Christmas and New Year's. Even tech companies with unlimited PTO are implementing shut-downs, said WTW's Derby. "Shut-downs provide an opportunity to catch up and recharge because everyone takes the same week off," Derby added.

Some companies are abandoning their unlimited time-off policies, which have not always met expectations. While some employees have abused the policy, others take fewer vacations than they did with a set number of days. As a result, some employers are reconsidering or have already returned to policies that limit the number of vacation days employees can take, typically two to three weeks per year, according to Will.

Aon's senior vice president of time away and life solutions practice, Sander VanderWerf, suggests that some employers may want to implement a vacation plan that requires workers to use their time or lose it. According to VanderWerf, employees are more likely to use more time when it does not carry over at year-end.