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 PTO pay when their employment ends.

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 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 PTO you'd like to use for vacation.

However, to rightfully call most of the shots, employers typically must clearly document 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 the rules.

As indicated above, your employee rights might also entitle you to collect accrued PTO pay when your employment ends. 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 their probationary periods.

If employees don't successfully complete their probationary periods or commit wrongdoings, such as not giving the required resignation notice according to company policy or state final pay laws, then employers might be entitled to withhold or delay accrued PTO pay; it depends on the law in each state.

Based on the outcome of the 2007 court case Catapult Technology, LTD v. Paul Wolfe, the Maryland labor department essentially ruled that Maryland employers may no longer withhold accrued PTO pay from employee final paychecks, even though company policy indicates that they may as discipline for employee misconduct (such as not giving the required resignation notice).

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, then "cheated" employees might be entitled to file discrimination charges or lawsuits.

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.