The no-vacation nation
Employers are not legally obligated to give paid vacation to their employees in the USA. The federal law is simple when it comes to a number of days employers have to offer for vacation, paid or unpaid. Zero.
The Fair Labor Standards Act dating from 1938 regulates everything from working hours, wages, and recordkeeping to child labor. Everything except paid time off.
State laws and company policies
All this doesn’t imply that workers will not have their time off. While federal law is lax, state laws give scope for negotiation between employer and employee.
When making company policies you should first check state laws. Each state has its own leave law and limitations. According to them it offers certain benefits for employees and may not allow certain policies. Vacation policy must have clear guidelines. We’ve given you each state in detail below so that you can verify all the given rules in your area.
In some cases, even counties and cities could have their specific rules in this subject.
Also, what makes a crucial difference in defining your company policy is whether you are a large employer (50 or more full-time employees) or a small employer (fewer than 50). This distinction is key for determining which perks and benefits would be required to offer in your working environment.
Vacation days in reality
In practice, paid vacation is perk number one in almost any working environment, and companies will treat this highly rated benefit with the utmost regard and due diligence. Although not required by federal law, most employers provide at least 10 days of paid vacation time thus keeping employees content.
1-B. Sick days
Whereas vacation days are just for joy and fun, sick leave is reserved for health care of employees, or another close family member (usually sick child or spouse). The usual number of days that the employer provides is 6 to 9 days.
Treating these days is the same as the vacation days when it comes to accrual policies and rollovers.
Sick days employers give doesn’t increase as the years of service go by.
For more about different types of sick leaves, check out our section below “Maternity Leave/Paternity leave/FMLA”
1-C. Personal Days
Understanding well personal days is important is defining and applying company policies.
Employees are free to use their personal time off work in any way they want for needs that are important. It can be a close relative who is seriously ill and needs attendance, a parent-teacher meeting, voting, longer medical appointments and preventive healthcare treatment, a moving day, attending a funeral or memorial service, or in case you’re celebrating a religious holiday which is considered as a national holiday.
PTO as a merit
In the end, PTO policy should not treat all employees with a one-size-fits-all principle, but rather on meritocracy. Which is to say that different vacation policy for different employees, based on length of service and accomplishments. As long as the reasons for vacation decisions aren’t a result of discrimination. Complied with this regulation, companies are free to offer vacation benefits in a way that matches their strategy. Basically, after respecting federal and state laws, it all comes down to the deal between employer and employee.
By all means, most employers will offer different amounts of PTO for full-time vs. part-time workers. Naturally, employees with longer length of service are increasing the number of vacation days gained at 5, 10, or 15 years.
2-A. Accruals of PTO (Paid Time Off)
On the federal level, no statute or law requires employers to provide employees with either paid or unpaid vacation or any other type of time off from work. However, each state has its laws regarding PTO policies and vacations and although states don’t specifically require employers to provide paid vacation time for employees, some regulate PTO accruals. Therefore, employers must comply with their state laws before setting their PTO policies.
PTO is considered to be any paid time off from work that the employee has earned but not yet used. Unlike accrued paid sick or vacation leave, that are treated separately, PTO combines vacation, sick and personal leave in one bank of time, providing employees with a more flexible approach to using their time away from work.
Depending on the employers’ policies, PTO can vary, but usually, it provides employees with time off that can be used for the following purposes:
- Personal Time Off
- Vacation time
- Sick leave
- Paid Holidays
- Pregnancy or disability leave
- Jury duty leave
I Eligible employees
- Employers working 40 hours per week and employees working less than 40 hours per week but not less than 20 hours are eligible to earn PTO hours on a prorated basis
- Employers working less than 20 hours per week on a regular basis, on-call or temporary employers are not eligible to accrue PTO
II Accrual Rates Calculation:
Accruals are based upon paid hours up to 2, 080 hours per year (40 hours per week), overtime hours are not included. New employees start PTO accrual benefits on the first day of employment and accrued time rates vary depending on whether the employee is a full-time or a part-time individual and the years of service they have.
The accrual rates vary in the frequency at which employees earn their time
- By hours worked (usually used for part-time employees)
- Every two weeks (bi-weekly)
- Twice a month
- Once a month
- Yearly (usually used for long-term or employees who have already put in a year of tenure)
Length of service determines the rate at which the employee will accrue PTO
Full-time accrual rates:
|Years of service||Accrual rate for two week pay period||Yearly PTO period||Maximum Accrual|
|Less than one year||4h||13 days (104 hours)||25.5 days (204 hours)|
|1-3 years||4.6h||15 days (120 hours)||33 days (264 hours)|
|4-10 years||6.1h||20 days (160 hours)||42 days (336 hours)|
|More than 10 years||7.7h||25 days (200 hours)||48 days (384 hours)|
Each employee’s bank of PTO hours has a yearly maximum and no PTO hours can be accrued beyond the maximum accruals listed.
States with mandatory paid sick leave laws decide how employers must calculate accruals.
III Average time off per year
- Based on an employee’s length of service:
For PTO plans: from 13 to 26 days
- By states:
Northeastern states (New York, New Hampshire, Maine, Vermont, Connecticut) – 11,4 days
South states (Louisiana, Georgia, Tennessee, Alabama, Florida) – 8,5 days
Midwest – 8,5 days
Western states – 9,4 days
IV Use of PTO
- Vacation Leave has to be scheduled in advance
- Personal days and sick days can be used without notice
- PTO can be used in increments of as low as one hour
- An employee is required to use PTO hours according to his or her regularly scheduled workday
- Employer may require that employee use accrued PTO hours (i.e. when taking Parental Leave to get paid during the leave)
2-B. Rollovers and payout of unused hours
Employers can decide to provide their employees with the rollover benefits according to their state’s requirements regarding roll over and PTO payout laws.
- Use-it-or-lose-it policy
– If the state’s law allows employers to implement policies, then employee’s unused accrued PTO days will not be rolled over from one year to the next year.
– If the state’s law does not allow an employer to implement policies, then the employer is required to roll over accrued PTO days from the previous to the next year. — – – However, an employer may place a cap on both total number of hours allowed to be rolled over and the total number of hours allowed to be in the employees bank.
States that don’t allow Use-it-or-lose-it policy: Montana, California, Nebraska.
States that allow it, but with certain exceptions: Massachusetts, Illinois.
All other states allow Use-it-or-lose-it policies.
- PTO payout at the termination
Some states have PTO payout laws, but in most of them payout law applies to earned vacation time.
States that require PTO payout: California, Montana, Nebraska, Colorado, Illinois, Indiana, Massachusetts, Louisiana, Rhode Island, New Hampshire.
States that require it, but with exceptions: Oregon, Wyoming, North Dakota, Wisconsin, North Carolina, New York, Maryland,
All other states do not require employers to provide PTO payout at the termination
- Parental Leave (Maternity, Paternity) and Family and Medical Leave Act (FMLA)
Two federal laws offer protection to new parents:
- The Pregnancy Discrimination Act: This law prohibits employers to fire, refuse to hire or deny a woman a promotion because she is pregnant, but it does not provide job protection to a pregnant woman or a new parent.
- The Family and Medical Leave Act: It provides employees with unpaid, job-protected leave after the child’s birth or when in serious health condition.
Many states provide longer job protection for parents to care for their newborn babies, than that provided by FMLA (12 weeks), and as for women pregnancy-related disabilities and recovery from childbirth.
States: California, Connecticut, Louisiana, New Jersey, Oregon, Rhode Island, Tennessee, D.C.
There are also states that adopted their own Family and Medical Leave laws regarding Parental Leave (Maternity and Paternity): California, Connecticut, Hawaii, New Jersey, Oregon, Rhode Island, Vermont, Washington, Wisconsin, D.C., New York, Massachusetts, New Mexico.
Types of leave that refer to Parental leave (Maternity and Paternity leave)
- Family Leave
This type of leave is used to care for a family member who is ill, including one who is suffering from a pregnancy-related disability or recovering from conditions related to childbirth. It also applies to a new parent to care for a biological, adopted or foster child
Paid Family Leave and Family Leave benefits
Women or men who take time off from work to care for family members or a newborn, newly adopted or foster child are entitled to receive partial or complete income replacement.
States with Paid Family Leave: California, Connecticut, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington and D.C.
- Medical Leave
Medical leave is taken by an employee to recover from illness and includes leave related to pregnancy-related disabilities and to recover from childbirth.
Paid Medical Leave, Short-term Disability Insurance and Temporary Disability Insurance
Eligible employees receive a partial or complete income replacement, Short-term Disability Insurance, and Temporary Insurance cover a portion of the usual wage amount. In some states benefits are payable only to a specific amount of time.
States with Paid Medical Leave: California, Hawaii, New Jersey, New York, Rhode Island, Washington.
- Parental Leave (Maternity and Paternity leave)
Parental leave is a type of Medical Leave and it provides time off from work for parents.
Paid parental leave, both Maternity and Paternity, depends on the state law and local policies or those voluntarily adopted by employers.
States with paid Parental Leave: New York, California, New Jersey, New Hampshire, and Washington, D.C.
City governments in Ohio, North Carolina, and Florida have passed paid parental leave bills for municipal employees.
Paid leave laws are being considered by state legislatures in Massachusetts, Oregon, Colorado, Connecticut, and Vermont.
I Maternity Leave
Maternity leave is the time when a woman takes the time off from work in connection with the birth or adoption of a child. It can include medical leave and parental leave. In many states birth mothers have benefits for pregnancy-related disabilities. This can include Short-term disability insurance benefits and the use of accrued sick leave, vacation leave or PTO time.
Depending on a state law different benefits are allowed regarding permitted paid amount of time for leave, job-protected time and requirements from covered employers.
Employers may require that employees also use their PTO time so she continues to get paid during the leave.
II Paternity Leave
Paternity leave is considered under the FMLA, providing biological or adoptive fathers to take unpaid leave up to 12 weeks after the birth or adoption of a child to care and bond with the child.
- Jury Duty Leave
The employer must allow employees to serve on any jury without any negative consequences to the business. The law doesn’t allow employers to take any action against employees for serving on a federal jury. At a federal level, an employer is not required to pay an employee while they are on jury duty.
List of States whose Jury Duty Leave laws provide employees with paid leave:
Alabama, Colorado, Connecticut, Louisiana, Massachusetts, Nebraska, New York, Tennessee.
- Bereavement Leave
Bereavement Leave represents the period taken by an employee due to a close family member’s death and to attend or organize a funeral for a close family member. This term refers to an employee’s spouse, parents, stepparents, siblings, children, grandparent, father-in-law, mother-in-law, brother-in-law, sister-in-law, son-in-law, daughter-in-law, grandchild or stepchildren.
There is no federal law that grants bereavement leave to individuals, the U.S. Family Medical Leave Act (FMLA) allows employees to take up to 12 weeks of unpaid leave for family-related matters. Bereavement leave depends on employee-employer agreement. Policies also differ from state to state, as well as organization to organization. However, most organizations allow the additional non-paid time off to the employee.
Bereavement leave is considered as unpaid leave and employees may be given up to three days off from work.
States with mandatory paid Bereavement Leave: Oregon, California, Rhode Island
- Voting Leave
No federal law requires employers to provide paid or unpaid Voting leave for their employees. However, many states have laws regarding the benefits that employers must provide to employees. Some prohibit an employer from financially penalizing employees during the voting leave, while others mandate employers to provide paid voting leave for their employees.
States that provide paid voting leave (up to two hours): California, Colorado, Maryland, New York, Washington
- Military Leave
A federal Law, The Uniformed Services Employment and Reemployment Rights Act (USERRA) provides unpaid leave up to five years, job protection and reemployment for all employees who are called to active duty in U.S. military, U.S. armed forces, Reserves, National Guard, Navy, and other Uniformed Services including the National Disaster Medical System and the commissioned corps of the public health system, or voluntarily chose to participate in such activities. It also provides protection for disabled veterans.
The law applies to all employers in the public and private sectors, including federal employers.
In addition to federal law, state laws may have different requirements, rights and benefits regarding the service, but nearly all states protect employees from being discriminated for serving in the military.
- Employees must meet certain requirements to be reemployed after they have returned from service:
- Employee must provide advance written or verbal notice of his service;
- to have five years or less of cumulative service in the uniformed services while working for a particular employer
- to return to work or apply for reemployment within a certain time, depending on the length of leave
- employee must have been honorably discharged from duty
- employee has to be provided with a same or similar position, pay and employment benefits as before the leave
Private employers are not required to provide paid leave. Military leave is intended to be added to any annual leave (PTO or vacation leave). However, employees may choose to use paid time when military leave is not paid.