definition of paid time off is any time not worked by an employee for
which the regular rate, a fixed or a prorated amount of pay, is accrued
and paid to the employee. Companies grant time off to give employees
down time and a chance to deal with non-work related issues. Despite the
high costs of paid time off, companies offer this employee-friendly
benefit primarily to be competitive in attracting and retaining talented
State and Local Holidays
addition to federal holidays, some employers also observe state and
local holidays. For example, many businesses in Massachusetts are closed
on Patriots Day, the day of the Boston Marathon, especially those
companies located along the marathon route. In the Chicago area, Pulaski
Day is considered a holiday by many employers.
However, many companies reserve the right to schedule work hours during holidays. This is particularly true in organizations such as hospitals, law enforcement, and emergency agencies. Other special circumstances may prompt employers to keep their workers busy during holidays. Those scheduled to work on these days may be compensated at a premium. Many retail and food service organizations have found it profitable to remain open on holidays, although some may offer limited hours.
By law, employers cannot prevent an employee from observing a religious holiday if it is that employee's belief or practice. For example, if a Jewish employee wishes to observe Yom Kippur, the employer may not deny that employee's request even if Yom Kippur is not a company holiday, although the employer may deny a Christian employee's request to take off on Yom Kippur.
Usually, employers and employees make arrangements for the extra holidays. Typical arrangements may be to take the day off without pay; or, to take it as a floating holiday, a personal day, a vacation day, a sick day, or in substitution of another company holiday.
Paid Time Off Plans
Some employers prefer to give their employees a general paid time off plan. This is a more flexible arrangement that gives the employee a set amount of days off to be used at the employee's discretion. These days can be used for sick time, personal days, vacations, or for whatever reason the employee may need time off. Like vacation and other forms of time off, the amount of days off generally accumulates through years of service and the level of the employee within the organization.
time is a voluntary benefit that organizations offer to employees. There
are no federal regulations requiring employers to provide vacation
days, but it has become common business practice to do so.
Employees accrue hours of paid vacation time at a certain rate for each
day worked. Different employers use different formulas to calculate
vacation time. So, an employee with 15 days of paid vacation time at one
company may or may not enjoy the same number of paid vacation days
after changing jobs.
Exempt employees should receive the same salary pay rate for vacation
days. So if you are exempt and take two weeks of paid vacation, you
should receive a paycheck for the same amount of salary for those two
weeks as if you had worked.
Earning Vacation Time
speaking, the amount of paid vacation time depends on the length of
service and the level in the organization. Usually companies have some
scale that decides how many paid vacation days an employee will receive.
Four or five weeks of vacation is not unlikely for an employee who
remains with a company for more than 15 years, although that's typically
the upper limit for vacation benefits in the United States. Some
employers base vacation days on the employment anniversary date, while
others use the calendar year to keep track. Employees should always ask
whenever there is doubt.
companies let employees carry unused vacation days over to the next
calendar year. Policies differ, but typically employees may carry over
five days. Not all companies pay cash for vacation days that are not
taken by the end of the calendar year. In certain states or, if it is
indicated in the employee's contract, a company may be required to
compensate employees for those unused vacation days when an employee
leaves the company or is let go. Some companies use a prorated payout
that is in accordance with the number of months of accrued service in a
HR managers are concerned about the effect of vacations on productivity,
staffing, customer service, and operating continuity. Therefore, when
you plan your vacation, you may need to notify managers and your HR
department to get clearance. This is particularly important if you want
to take time off during common holiday seasons, such as in August or at
the end of the year. Early notification allows for advance planning to
reduce the burden on your colleagues while you are away, and to minimize
the backlog of work when you return. Remember that vacation time, like
everything else, is negotiable. Just bear in mind that you might have to
forego other forms of compensation in exchange for more vacation time.
days are designed for employees to take time away from work for reasons
unrelated to illness, including moving days and doctor appointments.
Depending on the organization, personal days can be treated in
conjunction with sick days or separately. Companies that offer paid
personal days extend an average of one to four personal days per year.
Normally, organizations have a "use it or lose it" policy on unused
courts provide a small amount of compensation for jury service, some
companies compensate employees at their regular base rate of pay.
If you are called for jury duty, your employer will likely require you
to obtain verification that you have served from the court. If your jury
is excused earlier than the close of business, your employer could
require you to report to work.
Jury duty is considered a civic responsibility. In general, if your
employer is reluctant to permit you to serve, it is a matter for the
courts and the employer to resolve. Contact the clerk of the court where
you were called to serve if your employer resists letting you carry out
your civic duty.
Employees who are members of the reserve forces or the National Guard are subject to weekend duty, annual training duty, or short-term emergency duty. Companies are generally not required to compensate employees for leaves due to military service, but must grant a maximum of 14 days a year for such duty. The employee is not required to use his or her vacation or paid time off for days required for service.
may grant paid time off for employees bereaved by the death of an
immediate family member or a close relative. SHRM's 2004 Benefits Survey
shows that 90 percent of respondents offer paid bereavement leave.
Usually, employees are allowed three days off with pay, and no pay for
any additional time, unless employees arrange to use personal days or
vacation time. Advanced notice for a bereavement leave is not required.
Companies could have a narrowly defined list of people who are
considered immediate family members.
Family and Medical Leave
In 1993, President Clinton signed the Family & Medical Leave Act (FMLA), which allows eligible employees to take up to 12 weeks of unpaid leave for childbirth, adoption, foster care, to care for a child, parent, or spouse with a serious medical condition, or if the employee themselves has serious medical condition.