Glossary
‹ Resources

PTO (paid time off)

PTO (paid time off) is the umbrella term for paid leave — vacation, sick days, and personal time, often combined into a single bank that employees draw from for any reason. It is one of the benefits employees weigh most heavily, and one of the areas where US law is most hands-off.

How it works in the United States

No federal law requires private employers to provide paid vacation — the FLSA simply does not address it. The legal landscape is layered:

  • Vacation PTO is policy: amount, accrual, and rules are set by the employer, then enforced as promised.
  • Paid sick leave is increasingly mandated: a growing list of states and cities require employees to accrue paid sick time, typically by hours worked, with rules on carryover and permitted uses.
  • Payout at separation is state law: some states treat accrued PTO as earned wages that must be paid out when employment ends, and a few prohibit "use-it-or-lose-it" policies. See final paycheck laws.
  • Unpaid leave laws still apply: FMLA protects the job; PTO policies decide whether any of that time is paid.

For shift teams, the practical core is request handling: clear lead times, visible balances, and fair coverage decisions people can see.

No federal mandate (FLSA silent on vacation); state and city paid sick leave laws (e.g., California, New York, Seattle) and state wage laws on PTO payout — see your state labor department.

Tommy puts time-off requests, approvals, and the roster in one place, so a granted vacation is automatically a covered shift — not a gap someone discovers on the day.

Related terms