Overview: Employers often voluntarily offer different forms of paid time off (PTO) as an employee benefit. PTO benefits are meant to improve recruiting, retention and employee loyalty. Employers offer many different types of PTO, including vacation days, personal days, sick days and holidays. Instead of providing separate vacation, personal and sick days, some employers use a PTO bank, which does not differentiate between types of time off.
Employers should clearly define the way that PTO is earned and when it can be used. A written and published policy will help manage employee expectations and allow the business to properly staff all areas of the organization. It is also advisable for an employer to have a written and published policy for defending against potential lawsuits or for evidence in disciplinary proceedings. PTO policies should take into consideration state laws on "use it or lose it" policies and termination pay.
Trends: Unlimited vacation is a benefits trends that has become increasingly popular. Vacation is considered "unlimited" when an employer eliminates caps on vacation time, and presumably, employees can take as much time off as they want as long as they are getting their work done.
Author: Jessica Webb-Ayer, JD, Legal Editor
Updated to reflect proposed regulations that would update and revise the Fair Labor Standards Act (FLSA) overtime exemption requirements.
Updated guidance to reflect additional information regarding payment of vacation benefits upon termination.
Updated to reflect amendments to the Santa Monica paid sick leave law's enforcement provisions, effective February 7, 2019.
Updated to reflect the Illinois Service Member Employment and Reemployment Rights Act, effective January 1, 2019.
Updated to reflect the forthcoming Duluth paid sick leave law.
XpertHR offers many tools and resources to help an employer address mental health issues in the workplace.
XpertHR offers many tools and resources to help an employer address and manage challenging summer workplace issues.
This podcast features a conversation with XpertHR Legal Editor Robert Teachout about a study that shows many US employees are not using the full amount of their PTO time. Are managers sending mixed signals to their employees?
This section helps HR professionals identify the common forms of leave addressed by state law and those routinely granted by employers to help attract and retain employees. HR will also gain a greater understanding of the common considerations regarding leaves, how to develop leave policies and processes for requesting and taking leave and the risks inherent in providing forms of leave an employer is not legally required to provide.
Updated when to include and guidance to address the interplay between the Los Angeles minimum wage ordinance and its hotel worker minimum wage ordinance, which both provide paid time off to eligible employees.
Information, resources and tools on Paid Time Off Benefits.