Employers Strengthen Paid Leave Benefits During the COVID-19 Pandemic: Findings from the 2021 KFF Employer Health Benefits Survey
Benefits such as sick leave and paid family and sick leave can help workers meet their personal and family health needs with greater financial security. This issue took on renewed urgency during the COVID-19 pandemic as workers needed time off from work to recover from the virus and take care of children and other family members who were ill.
Unlike all other wealthy countries, the US does not have a national mandate for paid vacation. The Federal Law on Family and Sick Leave (FMLA) requires some employers to grant eligible employees protected, unpaid leave for family care and sick leave, but less than half (46%) of the workforce is eligible. According to the Bureau of Labor Statistics (BLS), eight in ten workers (79%) are entitled to paid sick leave through their employer, and fewer than one in four workers (23%) are entitled to paid family leave. Data on the proportion of workers entitled to paid sick leave for a prolonged, serious illness are limited, although BLS also estimates that 40% of workers have access to short-term disability insurance.
In the wake of the COVID-19 pandemic, some employers announced changes to their paid vacation policies to ensure more workers have access to paid vacation and reduce the risk of workers becoming ill at work. This data note contains results from the KFF Survey on Health Benefits for Employers 2021 on the proportion of employees employed in companies that have started offering or extending their paid vacation since the beginning of the COVID-19 pandemic.
Paid sick leave: Paid sick leave can be used to recover from a short-term injury or illness such as a cold or for medical appointments. It is often granted on an accrual basis up to a set number of hours or days per year, e.g. The average length of paid sick leave for private sector workers is seven days per year. The paid sickness benefit is paid by the employer.
Paid family and sick leave: Paid family and sick leave typically provide a set number of weeks or months that can be used for an employee's own serious, longer-term health, caring for a family member with a serious health condition, or caring for or bonding a new child , and for reasons related to a family member's military service. It offers an average of six to twelve weeks of fully or partially paid vacation per year without the need for accrual. Paid family and sick leave can be insured and are often financed by wage contributions from the employer and / or the employee.
Overall, nearly four in ten workers are employed by a company that started offering paid vacation or added to its existing paid vacation allowance during the pandemic.
37% (37%) of employees work in a company that is offering paid sick leave or paid family and sick leave for the first time, or has expanded or improved these benefits since the beginning of the COVID-19 pandemic (Illustration 1). This includes 31% of workers in companies that have started offering or extending paid sick leave and 17% of workers in companies that have started to offer or extend paid family and sick leave. One percent (1%) of the workforce is employed by a company that has cut or canceled one of their paid vacation benefits.
Looking at these changes separately, 4% of workers work at a company that is offering paid sick leave for the first time since the beginning of the COVID-19 pandemic, and 27% of workers work at a company that has expanded or improved their existing paid sick leave . One percent (1%) of the workforce is employed by a company that has either reduced or eliminated their sick pay.
Three percent (3%) of employees work for a company that is offering paid family and sick leave for the first time since the start of the COVID-19 pandemic, and 14% work for a company that is expanding or expanding their existing paid family and sick leave benefits has improved. Less than 1% of employees are employed in a company that has either reduced or canceled their family and sick pay benefits.
These proportions vary depending on the company characteristics. With paid sick leave, employees in small companies (3-199 employees) work more often than employees in large companies (200 or more employees) in a company offering paid sick leave for the first time (6% vs. 2). %) (Figure 2). Large firm employees are more likely to be employed by a firm that has added to its existing sick pay (31% versus 18%). Similarly, workers in firms with few low-wage workers are more likely to work in a company offering first-time paid sick leave than workers in firms with many low-wage workers (3% versus 7%).
There are also differences depending on company characteristics when it comes to paid family and sick leave. For example, workers in small companies are more likely than workers in large companies to work in a company offering paid family and sick leave for the first time (5% versus 1%). (Figure 3). Large firm employees are also more likely to be employed by a firm that has expanded its existing paid family and sick leave benefits (17% versus 10%). Similarly, workers in companies with few low-wage workers are more likely to work in a company that has expanded or improved their paid family and sick leave benefits than workers in companies with many low-wage workers (16% versus 7%).
In general, workers in small companies are more likely to be employed by a company that started offering paid vacation during the pandemic, and workers in larger companies are more likely to be employed by a company that has expanded its existing paid vacation benefits. These results echo previous research which suggested that vacation pay was already more common in larger companies and less common in smaller companies.
The COVID-19 pandemic has given the importance of paid leave a new urgency. In 2020, the Families First Coronavirus Response Act (FFCRA) temporarily required employers with fewer than 500 workers and all public employers to give workers who are unable to work due to their own quarantine or symptoms of the coronavirus up to two weeks of fully paid sick leave and up to two weeks of partially paid vacation for workers who needed time off from work to attend to someone in quarantine. These mandatory benefits expired at the end of 2020. (Note that our survey made changes to the regular paid vacation benefits, not the FFCRA temporary paid vacation benefits.)
Paid leave continues to attract national attention from both the general public and policy makers. The 117th Congress continues to debate a universal paid family and sick leave program as part of the Build Back Better Act. House Democrats originally proposed 12 weeks of paid vacation per year for all workers in the United States, which can be taken to recover from a serious illness, care for a critically ill family member, and welcome a new child. The proposal currently under discussion has been reduced to four weeks of paid leave. It remains to be seen whether this proposal will be implemented. Without action by Congress, the availability and generosity of paid vacation will continue to depend on the decisions of employers and state and local policy makers.
While many employers have responded to the need for paid vacation during the pandemic, it is unclear whether they will ultimately maintain, enhance, or reduce these new or improved benefits after the pandemic has subsided.
The Annual KFF Health Benefits Employer Survey (EHBS) 2021 was conducted between January and July 2021 and included nearly 1,700 randomly selected, non-state and private companies with three or more employees. The full EHBS, including a detailed methodology section, is available at ehbs.kff.org.
We asked respondents about changes to their vacation pay that they had made during the COVID-19 pandemic from January 2020 and that were in effect at the time of the interview. Paid vacation programs included a company's regular paid sick leave and paid family and sick leave programs, not those made temporarily available during the pandemic. Family vacation only included paid vacation benefits and not the employer's unpaid vacation obligations under FMLA. This survey cannot distinguish the robustness of vacation paid, including whether a company offered benefits prior to the pandemic or whether changes to vacation paid were planned before the pandemic began.