From Juneteenth to Unlimited PTO, Paid Leave Policies are Shifting

Paid leave policies have played a key role in employers’ response to the pandemic. Now, with the worst of the crisis behind us, it’s a good time to take stock of what changed in the past year and consider whether your program needs updating to keep pace with trends and meet business and workforce needs in the post-pandemic environment. Mercer recently wrapped up its 2021 Survey on Absence and Disability Management, in which over 400 employers provided detailed information on all types of absence programs. While the full results aren’t yet available, we took a peek at some of the findings on paid leave and compared them to results from our 2018 survey. Here’s what jumped out:

Juneteenth is now on the calendar of company holidays for nearly one in ten survey respondents. In the wake of the murder of George Floyd and the resulting social justice movement, we knew that some employers added Juneteenth as a company holiday and the new survey results provide greater insights into the prevalence. With many employers undertaking long-term initiatives to address diversity, equity and inclusion, adding Juneteenth as a paid holiday is a fast and highly visible way to signal commitment to this work.

Paid parental leave continues to go mainstream and is offered by 61% of respondents, up sharply from 41% in 2018. Paid parental leave is fast becoming a standard element in a comprehensive time-off program. Given the potential impact on recruitment/retention and productivity – and the expansion of complementary state mandated paid family leave across the US -- employers need to evaluate their program against fast-changing industry norms.

Unlimited PTO saw wider adoption in 2021. While in past years many employers may have considered unlimited PTO, actual implementations were rare. The need for options and flexibility during the pandemic, as well as greater focus on liabilities for accrued but unused PTO, seems to have inspired a number of employers to move ahead, mostly for exempt employees. In 2021, 20% of respondents say that at least some of their employees are offered unlimited PTO, up from just 14% in 2018. With more UPTO programs in place, employers will soon have more evidence to evaluate the pros and cons of  offering the ultimate in flexible time off.

Compliance with state and local leave mandates has long been a challenge for employers, and the patchwork of rules has only become more complex in the wake of the pandemic. Employers either deal with changes as they come or allocate resources to a third party to help them stay on top, but many survey respondents say they would welcome a national voluntary program of minimum standards for paid leave. President Biden included paid family and medical leave as part of his American Families Plan proposal, and the House of Representatives has released a proposal to support paid family and medical leave. While there is no guarantee anything will happen in Washington, the odds are greater than ever before.

You can see these and other data highlights in this infographic. Complete survey results will be available in July.

Rich Fuerstenberg
by Rich Fuerstenberg

Senior Partner, Health, Mercer

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