Paid Time Off (PTO)
Instead of designating employee paid time off as vacation, sick
leave and such, these days many employers lump it altogether and
simply call it paid time off or PTO for short.
The advantages of undesignated PTO for employers include reduced tracking
of employee paid time off and often, reduced employee sick-leave abuse.
The advantages for employees include flexibility in how they use their
paid time off and the potential to collect accrued (earned but unused) PTO pay when their employment
Regardless of the advantages, employers are not obligated to provide employee
paid time off unless contractually arranged,
such as in collective
bargaining agreements. That's because there are no Federal
employment or labor laws that require it.
For example, the Fair Labor Standards Act (FLSA), considered to be the "main" pay
law because it regulates equal pay, overtime
pay and the minimum wage from the Federal
level, does not require employers to grant employee paid time off. In fact,
the FLSA doesn't require employers to grant any employee time
off from work, paid or not.
The Federal Family
and Medical Leave Act (FMLA) requires employers to grant time off
to eligible employees to care for themselves or family members, but
the FMLA does not require employers to grant paid time off.
Still, some employers permit employees to use accrued PTO or borrow against
future-earned PTO for FMLA leave.
Many employers voluntarily provide paid time off anyway, to attract and
retain employees in competition with other employers. But, because providing
employee PTO benefits is voluntary, employers may impose limitations and
conditions; in other words, your employer may call most of the shots, such
as requiring you to postpone earned PTO that you'd like to use for vacation.
However, to rightfully call most of the shots, employers typically must
have clearly documented the underlying limitations and conditions. Most employers
do so in company policy manuals or related documents.
To rightfully take disciplinary action against employees for paid time
off policy violations, employers typically
must also have made employees aware of the documented policies in advance,
along with the consequences for violating them.
Even though providing paid time off benefits is voluntary for employers,
if yours has "promised" PTO to employees of your classification
per policy, then your employee rights entitle you to take it, if you follow
As indicated above, your employee rights might also entitle you to collect
accrued PTO pay when your employment terminates.
Many state final pay laws require employers
to issue accrued PTO pay in employee final
paychecks, particularly accrued vacation pay. Some of the laws consider
any accrued paid time off to be the same as accrued vacation, if it's not
specifically designated as vacation, sick leave or personal days.
Employers might allow earned paid time off to accrue during employee
probationary periods; but, generally, employers may require employees
to wait to use their accrued PTO until after they successfully complete
their probationary periods.
If employees don't successfully complete their probationary periods or
commit "wrongdoings" (such as not giving the required resignation
state laws might permit employers to withhold or delay accrued PTO pay
after employment termination.
On the other side of the fence, if employers don't fairly and equally
apply paid time off policies to all employees of the same classification,
employees might be entitled to file discrimination charges
Read About Employee Benefits for more
information regarding avenues of relief, should your employer wrongfully
deprive you of paid time off or any other employee
benefit to which you're entitled by company policy or law. Alternately
or additionally, consult an attorney.