Americans are increasingly getting paid for not doing work.
Growth in paid time off—including family leave, sick leave, and vacation—is widening the gap between the number of hours for which workers get paid and the number of hours they are actually on the job.
Employers have expanded paid benefits to retain and attract workers in a hot job market. Employees, meanwhile, are using the new benefits as they juggle work, family, and health.
Trevor Guy earlier this month used new benefits offered by his restaurant employer to get paid for the time he took off from work after the radiator fan on his 2004 Mustang broke on the way to the job.
Guy, a 25-year-old manager at Tono Pizzeria + Cheesesteaks, a five-restaurant chain in the Minneapolis-St. Paul area said he was stuck on the side of the road for six hours and needed a couple more hours to arrange a repair.
He called in, the restaurant found someone to cover him, and he received his normal pay while handling one of life’s curveballs.
“Having that flexibility when life happens is a big benefit,” Guy said.
Tono’s expanded its paid time-off policy this year to all of its workers, from full-time managers to part-time dishwashers. Full-time staff get 40 hours a year plus an additional hour for every 30 hours on the job. Part-time workers get an hour and a half for every 30 hours.
Americans broadly receive less paid leave and work more hours than their peers in other developed countries. Tono’s, however, is among many employers expanding such benefits.
As of this spring, employers offered 80% of workers paid sick leave, up from 67% a decade ago, according to Labor Department data. Paid vacation expanded to 77% of the workforce from 74%. And paid family leave, with the most dramatic jump, increased to 27% from 12%.
During the same period, the unemployment rate dropped to a half-century low of 3.4% from above 7% a decade ago. As of August, there also were about 3.3 million more job openings than jobless people seeking work, according to Labor Department data.
As a result, the paid workweek held steady at 34.5 hours over much of the past decade—except for a spike when businesses raced to gear up as COVID-19 started to fade. The number of hours worked dropped to 32.9 a week in the first half of this year from 33.5 a week a decade ago, according to research from Federal Reserve Bank of Atlanta economists Lei Fang and John Robertson.
The rise in paid time off as a part of employee compensation is responsible for the growing gap, the economists concluded.
Fewer hours on the job might also reflect changing attitudes toward work, especially in the aftermath of the pandemic. And this appears to be continuing despite cooler job growth this year compared with the prior two years. Separate data from job-search site Indeed shows a steady increase in employers advertising benefits such as paid time off even though job openings have fallen from a recent peak.
What was once a perk might have become more broadly ingrained in the labor market as an expected benefit. “I think that’s definitely at play here, workers having higher expectations,” said Indeed economist Cory Stahle.
The balancing act for employers and the economy: Less time on the job could feed into the worker shortages that have bedeviled the labor market since the pandemic rebound.
“Business owners are already trying to deal with missed sales opportunities because they don’t have enough staff,” said Holly Wade, executive director of the research center at the National Federation of Independent Business, a trade group for small-business owners. “The days off are adding another element of stress.”