Time off Policies

What is a time-off policy?

A time-off policy is used to pool time off hours for sick days, vacation days, and personal days, allowing employees to use when they need it. The number of hours for an employee toward a policy is decided by their employer. It’ll differ across organizations and there’s no specific law.

Time-off policies are classified into different categories:

• Paid time-off policy
• Paid sick leave policy
• Vacation time-off policy
• Family and Medical Leave Act (FMLA)
• Unpaid time-off policy

Paid time-off policy

Paid time off (PTO) policies with certain hours are provided by an employer to the employee to take off when needed, and it can be used for sick, vacation, and personal days. PTO hours for an employee can be given completely for a year or chosen to accrue based on the time employee worked.

Employers can opt to roll over the unused hours to the next year, partially or completely, or set to start accruing hours afresh.

Note: States such as California requires employers to pay the unused hours of PTO policy during the time of employee’s separation from the company.

Paid sick leave policy

Some states and jurisdictions require employers to provide sick leaves to employees. Each state has different requirements and rules for organizations operating in the respective state. States that have separate paid sick leave laws are as follows:

• Arizona
• California state and its jurisdictions such as Berkeley, Emeryville, Long Beach, Los Angeles, Oakland, San Diego, San Francisco, and Santa Monica
• Connecticut
• Washington, D.C.
• Chicago and Cook County, Illinois
• Maine (Effective January 1, 2021)
• Maryland state and its jurisdictions such as Montgomery County
• Massachusetts
• Michigan
• Jurisdictions in Minnesota such as Duluth, Minneapolis, and St. Paul
• Nevada
• New Jersey
• Jurisdictions in New York such as Westchester County and New York City
• Oregon
• Jurisdictions in Pennsylvania such as Philadelphia and Pittsburgh
• Rhode Island
• Jurisdictions in Texas such as Dallas, Austin, and San Antonio
• Vermont
• Washington and its jurisdictions as such as SeaTac Airport, Seattle, and Tacoma

With a paid sick leave policy, employees can only take time off for illness and other health-related purposes.

It’s not needed to provide a paid sick policy to employees if you’re already offering a paid time off policy to employees if the PTO policy

• allows employees to use the same amount of leave under the same conditions as required by the paid sick leave laws of the state;
• satisfies the accrual and carryover requirements of the state.

Also, employers don’t have to pay for the unused sick leave hours when the employee leaves the organization.

Vacation time-off policy

No federal laws or FLSA mandates employers to provide vacation pay to employees. Also, if your company has a separate paid time-off policy, it’s not required to have a vacation policy as the PTO policy itself offers leaves for employees toward sick and personal days including vacation days.

The employer can decide how the number of vacation hours for an employee based on industry standards and employee requirements. Also, the employer decides the accrual method and whether the unused hours should be rolled over to the next year or not.

Family and Medical Leave Act

The Family and Medical Leave Act (FMLA) provides covered employees with up to 12 weeks of unpaid, job-protected leave per year for specified family and medical reasons. It also requires that the employees’ group health benefits be maintained during the leave period.

Employees eligible to FMLA are entitled to:

12 workweeks of leave in a year for the following reasons:

• the birth of a child and to care for the newborn child within one year of birth;
• the placement with the employee of a child for adoption or foster care and to care for the newly placed child within one year of placement;
• to care for the spouse, child, or parent who has a serious health condition;
• a serious health condition that causes temporary disability in performing the essential functions of their job;
• any qualifying exigency arising out of the fact that the spouse, son, daughter, or parent is a covered military member on “covered active duty;”

26 workweeks of leave during a year to care for a covered servicemember with a serious injury or illness if the employee is the servicemember’s spouse, son, daughter, parent, or next of kin (military caregiver leave).