U.S. employers have $224 billion in accumulated vacation time on their balance sheets due to employees who have rolled over unused vacation days, according to new research from Project: Time Off, the U.S. Travel Association's initiative promoting the personal, business, social, and economic benefits of paid time off.
Titled "The Hidden Costs of Unused Leave: Balancing Employee Needs with Business Liabilities," the research concludes that U.S. companies carried forward $65.6 billion in accrued vacation costs last year alone at an average cost of $1,898 per employee -- or $2,609 per employee for companies with more than 500 employees.
"The private sector's vacation liability is nearly half the size of the national deficit, but it doesn't have to be that way," U.S. Travel Association President and CEO Roger Dow said in a statement
. "Through regular communication and a clear policy, businesses can decrease their liability while increasing productivity and improving employee well-being: It's the double bottom line."
The report suggests three different strategies that can help companies enhance their vacation policies and lower their vacation liability: incentive programs, which incentivize employees to use their vacation time; unlimited vacation policies, which allow employees to take as much time off as they like, provided they get their jobs done; and minimum vacation policies, which require employees to use at least some of their paid time off.
Concluded Dow, "I hope this research makes business leaders review their own vacation liability. But more importantly, it should inspire them to take a look at their own policies, culture, and communication around time off."