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Paid Time Off (PTO)

Paid time off, or PTO, is an employee benefit or policy that allows employees to accrue hours as they work that they can then use to take time off when they need or desire. Employees are still paid for their time away from work, even though they are not working. Generally, workers earn a certain number of hours per pay period, or have access to a limited number of days per calendar year.

PTO Use

The hours could be used as sick, vacation, or personal days. Some employers have separate vacation/personal days and sick days. Whether or not maternity leave, disability leave, jury duty, FMLA leave, and paid holidays are considered PTO is dependent on company policy and employment law regulations.  Some employers may require the use of paid leave while an employee is on leave other than PTO. The interaction between PTO and other employment laws could be subject to state or local laws and employers should check requirements prior to restricting employees use or access to PTO.

The use of PTO by exempt and non-exempt employees (salaried vs. hourly employees) is up for debate for some. Some employers require exempt, salaried employees to use PTO for partial days worked. Others might not. It’s best to refer to state laws and company policies regarding taking partial days off. 

PTO Accrual 

There may be local or state laws or company policy that dictate the use of PTO, how it is accrued or defined. There is no federal law the required employers to offer PTO. Some employers offer unlimited PTO, where employees don’t have to accrue days before they can take them or make up time for hours used. They can take as many as they want, so long as the time off is approved by a manager and work performance does not suffer.

Some employers allow employees to rollover hours from one year to the next. Others must use the hours before the end of the year or they lose them. Some employers may pay out unused PTO at the end of the year or when an employee leaves the company. Some employer’s policies increase the amount of PTO available based on an employee’s length of employment with the company. i.e. an employee with one year of service may receive 12 days of PTO, while an employee with 10 or more years of service may receive 24 days of PTO per year.

Employees who are uncertain about how they can use their PTO should review their employee handbook or consult HR to best understand their benefits and employer expectations.