Vacation time in the U.S. explained

The US's culture with respect to vacation can be quite confusing to navigate. This article is a basic guide to how vacation time in the United States works.

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Maggie McGrath
Content Consultant and PhD Candidate at the Oxford Internet Institute

Vacation time in the United States varies widely by employer and profession. In fact, the US is the only advanced economy that does not guarantee paid vacation time. Like healthcare, this can sound daunting if you come from a nation with more generous leave policies. We’ve explored the variance in US vacation time, taking in the good and the bad, and explained the ways in which you can make sure your vacation time is working for you while you work hard for that beach holiday. 

US vacation time vs. the world

This chart by data scientist Niall McCarthy illustrates just how far the US is behind globally on the vacation front. When negotiating a salary in the US, it is essential to research your company’s policies before signing an offer letter. Many coming from places like the EU might notice a salary increase without considering you’ll most likely work an additional three weeks of the year. In other words, you’ll be at your desk earning that pay raise while your European counterparts are on Summer holidays.  

Standard private sector PTO

According to the Bureau of Labor Statistics, 10 days is the average paid vacation time after one year of service. Additionally, most companies with boilerplate PTO (paid time off) will honor at least some federal holidays and a couple personal days. While one in four workers does not receive any PTO, most H-1 visa holders are eligible for some and paid federal holidays.  

Standard federal holidays

Government employees receive ten paid Federal Holidays. The private sector is not required to honor those holidays, but some like Thanksgiving Day are nearly universal, with 97% of employers issuing a paid day. Others, like Veterans Day are only honored 20% of the time. The Balance has a handy infographic that shows the likelihood you’ll get a Federal holiday off. When Federal holidays fall on a weekend, like July 4th, often the holiday is observed on the adjacent Friday or Monday. Industries that require constant coverage, like hospitals, will often ask staff to work either Thanksgiving or Christmas but not both.

Federal Holidays

  • New Years Day (January 1st)

  • President’s day (Third Monday in February)

  • Memorial Day (Monday at the end of May)

  • Independence Day (July 4th)

  • Labor Day (Monday at the beginning of September)

  • Columbus Day (Second Monday of October)

  • Thanksgiving (Thursday at the end of November)

  • Christmas Day (December 25th)

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Balancing the cultural acceptance of taking vacation vs. your rights as an employee

Statistically Americans underutilize vacation time. Most private sector vacation time has to be approved by your manager. This can vary greatly based on your manager’s outlook on vacation, and your company’s overarching attitude towards PTO. If your manager won’t sign your vacation time during a busy or essential period of the year, that’s considered reasonable, although it requires your best judgement to assess if they are true busy periods. If your manager simply won’t approve vacation period or says it’s always busy, you should speak to your human resources representative.

The good news is within the private sector, it is becoming increasingly common to actually take time off. Workers used more of their time in 2017, for an average of 17 days, hitting the highest level in 7 years. Not feeling comfortable taking all your vacation time is a relatively new phenomenon. Between 1978 and 2000, workers took an average of 20.3 days. The reasons a worker’s vacation goes unused include feeling like vacation makes them look less dedicated, others say their workload is too heavy and the feeling that no one could do their job. 

Studies have shown that taking vacation time actually leads to raises and promotions. Although it is unclear why, vacation gives you time to recharge your batteries and do your best work upon return. Additionally, it sets you up as an assertive, confident employee. Also, don’t forget vacation time is a negotiated benefit - part of your salary package. Not taking vacation time, even if you just stay at home, means you are potentially leaving money in your employer’s pocket. In 2016, Americans forfeited 206 million vacation days. Some will roll over to the following year, but many are simply lost.  

The “Netflix” model: Unlimited vacation pros and cons

Many companies, especially in the tech sector, are starting to offer unlimited vacation time. This is appealing compared to the rigid and limited policies many companies have. The emphasis is on getting your work done, not tracking hours. However, the subtext can vary greatly based on your employer and manager. Some employees have found the unlimited vacation policy is false marketing. One employee, whose company has remained anonymous, said that while negotiating his offer his employer hinted that most people took four weeks a year, but wouldn’t “guarantee that in writing”. After spending a year working for a manager that didn’t take more than 10 days, within a broader culture that did the same, he felt uncomfortable taking more time. 

Unlimited vacation does not roll over, meaning if you quit you aren’t owed unused vacation or personal time. And of course, this policy simply wouldn’t work in many industries that require steady coverage, ranging from manufacturing to healthcare. When exploring a company with unlimited vacation, make sure you consider your options carefully. 

For most H-1 visa holders joining the American salaried workforce, some version of 10 days paid vacation plus a few federal holidays will be the norm. Because actually using those vacation days is beneficial for both your health and career, make sure you use them. This may involve setting early and clear guidelines with your manager and making sure you understand the actual, not advertised, company culture before accepting an offer. Like many aspects of American work culture, it is worth doing your homework in advance to make sure you and your employer are a best fit.

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