Paid Time Off (PTO) in the United States
Vacation Leave Quota
0 days. Neither federal nor state law requires an employer to provide vacation leave (paid or unpaid) to employees.
Private employers in the United States are not required to provide paid or unpaid vacation to their employees.
The federal law is simple when it comes to the number of days employers have to offer for vacation, paid or unpaid. Zero. The same goes for state laws. The Fair Labor Standards Act, dating from 1938, regulates everything from working hours, wages, and recordkeeping to child labor. Everything except paid time off.
Vacation Days in Reality
All this doesn’t imply that workers will not have their time off. 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.
Employers are allowed to provide employees with more vacation time than is legally required. Although not required by federal or state law, most employers typically provide at least 10 days of paid vacation after a full year on the job, thus keeping employees content. This is common practice in the private sector.
However, the amount of paid time off (PTO) can vary based on factors such as the industry, location, and the employee’s length of service with the company. PTO policy should not treat all employees with a one-size-fits-all principle, but rather on the basis of a meritocracy. This is to say that different vacation policies apply to different employees, based on length of service and accomplishments. As long as the reasons for vacation decisions aren’t a result of discrimination.
Understanding personal days well is important in defining and applying company policies. Personal days are different from vacation or sick days. Employees are free to use their personal time off work in any way they want for important needs. 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, etc. In contrast to vacation or sick days, personal days cover a wider range of reasons for taking time off.
While vacation leave has to be scheduled in advance, personal and sick days can be used without notice.
Although neither federal nor state laws mandate that employers must offer vacation time, if employers do choose to provide vacation benefits, the rules and regulations governing those benefits can vary significantly from state to state (when it comes to accruals, rollover, vacation pay, and payment of unused vacation on termination).
Though the accrual system is not required by law in the US, it is used by most companies.
Employers are generally free to design their own vacation accrual system, such as hourly, daily, weekly, bi-weekly, semi-monthly, or monthly increments. Accruals are usually based on the pay period (pay frequency). According to federal labor law, there is no set requirement for how frequently an employee must be paid, meaning that any pay frequency is permissible. However, many states have their own laws regarding how often employees should be paid.
Typically, an eligible employee must work more than 20 hours per week regularly to accrue PTO. Employees regularly working less than 20 hours per week, temporary employees, and on-call employees are usually not eligible.
Most states allow an employer to place a reasonable cap (limit) on the total number of hours allowed to be in the employees’ bank.
Carry Over (Roll Over, Brought Forward)
A use-it-or-lose-it policy is allowed in all states, except Montana, California, and Nebraska.
A “use-it-or-lose-it” type of vacation leave policy requires an employee to lose any unused vacation time after a set date, usually the end of the year.
If the state’s law allows employers to implement this policy, then employees’ unused accrued PTO days will not be rolled over from one year to the next. 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 year to the next.
States that don’t allow a use-it-or-lose-it policy: Montana, California, and Nebraska.
States that allow it, but with certain exceptions: Massachusetts and Illinois.
All other states allow a use-it-or-lose-it policy.
Employers usually implement a use-it-or-lose-it vacation policy because some employees use very little PTO. Long-term employees can accrue a lot of PTO over the years, which can be quite costly if company policy requires it to be paid out on termination.
Statutory Provisions Addressing Vacation Pay
Not required by federal law, some states consider vacation pay “wages”.
While federal law is flexible, state laws give scope for negotiation between an employer and an employee.
Although no state mandates employers to provide paid or unpaid vacation, state labor and employment statutes may impose limitations on payments for paid vacation when it is offered by employers.
Payment of Accrued, Unused Vacation on Termination
Not required by federal law, some states require it.
Employers don’t have to offer paid time off, but if they do, they need to know the state’s PTO payout laws. Laws differ by the state on whether an employee is entitled to receive payment for accrued but unused vacation when their employment ends.
States where payment of accrued, unused vacation on termination is required by state law: California, Colorado, Connecticut, Illinois, Indiana, Massachusetts, Nebraska, Louisiana, New Hampshire, and Rhode Island.
States that require it, but with exceptions: Arkansas, District of Columbia, Kentucky, North Dakota, Maryland
All other states do not require employers to provide a PTO payout at termination. In states where payment of accrued, unused vacation on termination is not required, an employer must pay this only if company policy or an employment contract specifically requires it.
Sick Leave in the United States
Federal Laws – Leave Quota
Federal law requires no paid sick leave and 12 weeks of unpaid sick leave.
The standard federal Family and Medical Leave Act (FMLA) requires 12 weeks of unpaid sick leave. The leave is job-protected and applies to all states in the US.
What makes a crucial difference in FMLA coverage is whether you are a large employer (50 or more full-time employees) or a small employer (fewer than 50).
Employees qualify for FMLA benefits only if:
- they have been employed for at least 12 months (at least 25 hours per week) or 1,250 hours in the previous year
- they work in a location where at least 50 people are employed by the company (in a 75-mile radius)
The FMLA entitles qualified employees to take up to 12 weeks off for:
- personal medical reasons – illness or injury
- to care for a close family member (child, spouse, or parent) suffering from a severe illness
- maternity or paternity leave
- Military caregiver leave, which allows employees to take up to 26 working weeks of unpaid leave during one year to take care of their military relative (a member of the Armed Forces, the National Guard, or the Reserves) if he or she has a qualifying severe illness or injury.
Employers are free to propose additional sick leave benefits that are better than the minimum federal requirement.
Check out our article on FMLA to learn more.
Additional State Laws
Certain states have additional laws mandating paid or unpaid sick leave.
Currently, 18 states and Washington, D.C. provide employees with state sick leave (or provide family and medical leave that can be used as sick leave). Additionally, certain cities and counties have their own laws mandating sick leave for employees. The specific details of these laws, including whether the leave is paid or unpaid, depend on the state and the employer’s size.
Arizona, California, Colorado, Connecticut, Delaware**, the District of Columbia, Maine*, Maryland, Massachusetts, Michigan, Nevada*, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin have mandatory paid (or unpaid) sick leave laws.
*Maine and Nevada require employers to provide paid leave for any reason, including non-medical personal reasons.
** Implementation of the new Healthy Delaware Families Act will begin in 2025.
Maternity, Paternity, FMLA in the United States
Federal law does not provide paid parental leave, but 12 weeks of unpaid maternity/paternity leave is provided by FMLA.
The Family and Medical Leave Act (FMLA) is a federal law that allows eligible workers to take up to 12 weeks of unpaid, job-protected leave per year for family or medical reasons, including maternity or paternity leave. Unless otherwise authorized by the employer, an employee must take this leave continuously. More information about FMLA eligibility can be found above, under the section Sick Leave in the United States: Federal Laws – Leave Quota.
The Pregnancy Discrimination Act (PDA) is one more federal law that protects pregnant women. According to the PDA, discrimination against pregnant people is prohibited in all areas of employment: hiring, firing, pay, job assignments, promotions, fringe benefits, training, leave, and health insurance.
Additional State Laws
Certain states have additional family and medical leave laws that can be taken concurrently with the FMLA leave or separately.
Family, Medical, Maternity, and parental leave that will either work concurrently with FMLA leave or in addition.
Family leave provides time 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 caring for a biological, adopted, or foster child.
Medical leave is taken by an employee to recover from illness and includes leave related to pregnancy-related disabilities and to recover from childbirth.
Parental leave is a type of medical leave and it provides time off from work for parents.
Paid Family Leave Law
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.
Currently, 13 states and Washington D.C have enacted paid family leave laws:
- California, Connecticut, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Virginia, Washington, and Washington, D.C. have laws in effect.
- Colorado, Delaware, Maryland, and Oregon have enacted laws, but they are still not in effect.
Unpaid Family Leave Law
Hawaii, Maine, Minnesota, Louisiana, Tennessee, Vermont, and Wisconsin have mandatory unpaid family leave laws.
Bereavement Leave in the United States (Funeral Leave)
An employer is not required to provide 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.
No federal law requires employers to provide employees with paid or unpaid bereavement leave, or any time off to attend an immediate family member’s funeral.
Almost all states don’t require employers to provide bereavement leave to their employees. Only two states have laws that require employers to provide bereavement leave: Oregon (which took effect in 2014) and California (which took effect in 2023).
However, nearly all American companies, offer paid time off for bereavement, which usually lasts 3 to 5 work days.
Jury Duty Leave in the United States
Employers must provide employees with unpaid (or paid) time off for jury duty.
At a federal level, employers are required to provide employees with unpaid, job-protected leave to report to jury selection or jury duty. If asked, an employee must display a jury summons to his or her employer.
Jury duty leave laws differ from one state to another.
Most states do not require an employer to pay employees for the time spent on jury duty.
States whose jury duty leave laws provide employees with paid leave are Alabama, Colorado, Connecticut, Louisiana, Massachusetts, Nebraska, and Tennessee.
Depending on the size of the employer, jury duty leave may be paid or unpaid in New York and the District of Columbia.
Even in states where employers are not required to pay employees for jury duty leave, many do it as the court compensation is rather low.
Jurors receive a small compensation from the court for time spent while serving on a jury or at jury selection. Employees who serve as jurors in the U.S. are paid from $5.00 to $50.00 a day (depending on the state). Although juror pay is only a token amount.
Military Leave in the United States
All employers in the U.S. must comply with USERRA. Additional state laws.
The Uniformed Services Employment and Reemployment Rights Act (USERRA) is a federal law that applies to employers of all sizes and types in the U.S. USERRA protects employees called to active duty in the U.S. military, including the U.S. Armed Forces, Reserves, and National Guard. USERRA provides reinstatement rights, protection from discrimination, the right to continue group health care benefits for up to 24 months during their leave, and up to 5 years of unpaid leave for military service (with exceptions to this 5-year limit).
Employees must meet certain requirements to be reemployed after they have returned from service:
- an 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;
- an employee must have been honorably discharged from duty.
An employee must be given the same or a similar position, pay, and employment benefits as before the leave.
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 against for serving in the military.
Additional State Law
Many states have additional laws that allow members of the state militia or the state National Guard to take time off. State laws may grant USERRA rights to employees who are called to training or other active state duty, or provide different rights for state military service. It’s important to note that most states have rules against discriminating against employees who serve in the military. For private employers, state laws usually mandate unpaid leave.
Private employers are not required to provide paid military leave.
Voting Leave in the United States
Voting leave is not guaranteed on the federal level.
There is no federal law that requires employers to provide employees with paid or unpaid voting leave. Instead, states have their own laws that require employers to provide their employees with some voting leave benefits. Some of these laws require the leave to be compensated, while others only require employers to permit their employees to take unpaid leave. Currently, 29 states have laws providing employees with time off for voting.
The United States Federal Holidays for 2023
A leave for holidays is not required by federal law.
At a federal level, private employers in the U.S. are not required to provide paid or unpaid leave for holidays.
Holiday leave is mandatory for private sector employers in just 3 states, and no other states have such a requirement for private employers to grant time off to their employees on holidays.
However, the majority of employers in the U.S. do provide at least several paid holidays.
Complete list of official holidays recognized and celebrated in the U.S. in 2023:
Leave Laws for Each State
When making company policies employers 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. The 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.
Also, what makes a crucial difference in defining company policy is whether a company is 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 the working environment.