Should Paid Vacation be Mandatory?

Congressman Alan Grayson last week introduced legislation that would require employers of over 100 employees to grant employees (both full-time and part-time) one week of paid vacation after one year of employment.  Grayson says this is a “bold move to stimulate the economy” by increasing productivity. And he thinks people need to take vacations to make them happier. 

Among the benefits of this legislation (from Congressman Grayson’s website):

• The bill would provide a much-needed spark for the travel and tourism industry.
• Employees want free time.  The PEW Research Center says “more free time” is the number one priority for middle-class Americans – 68% listed this as a high priority for them.
• Almost one-third (28%) of Americans receive no paid vacation. Only 69% of lower-wage workers get any paid vacation leave (Opinion Research Corporation, 2008).
• Rep. Grayson also cited research showing a link between time off and well-being and happiness of employees.   People need time off for a better life, he states.

Some possible negative consequences of this legislation (as suggested by Susan Heathfield, About.com Guide to Human Resources):

• Fewer employees may be hired, reducing the positive effect on the economy.  Some employees may be let go before the end of a year in order to avoid having to pay for time off.
• Employers may reduce other benefits to make up for the cost of this benefit.
• Additional costs will likely be passed on to consumers, raising prices in a time when consumer spending is in a slump.

You might also consider that small business owners like us don’t get paid vacation.  If we don’t show up, we don’t get paid.  This is true for freelancers, contract workers, seasonal employees and others.  While it’s great to think that people should have paid vacation, I’m skeptical about adding more costs to U.S. businesses at a time when many are already in financial trouble.  This is not the time to worry about people not getting to go to Disneyland.  They should be worrying about having a job that pays them enough to live on and have a little left over for a picnic.

What do you think?

Image: sxc.hu