Paid Time Off Programs


Employers are under no obligation to provide paid vacation, sick or holiday time to employees under any state or federal law. As a result, employers are able to determine if and how much leave to offer, to which types of employees it is offered and what type of paid time off system to utilize. Existing personnel policies and actual practices extend these benefits so it is important to have and follow written rules.

Traditional Paid Time Off

The most common paid time off system is a traditional program that has separate categories of vacation, sick and holiday leave. Other categories could include personal time, flexible holidays, bereavement/funeral leave and jury duty leave time. Under such a system, the employer is obligated to track employees’ time off and assign the leave based on the reasons for their absence. The system attaches rules to the accumulation and use within each category. For example, a city may provide two weeks of paid vacation only for full-time employees or the city may create a separate rule for part-time or seasonal employees to accumulate such leave at lower levels or not at all. The amounts and the types of employees eligible for any type of leave should be specified in the city’s personnel policies.

Integrated Paid Time Off (PTO)

Rather than allowing employees to accrue various banks of leave for vacation, sick or bereavement, employees under a PTO system each have a single block of paid leave time that can be used for such purposes. These types of programs have grown steadily in recent years and according to the International Public Management Association for Human Resources and are expected to continue to increase in the coming years. The reported benefits of this type of program include a decline in unscheduled absenteeism, reduced administrative burden and improved morale. Most of these programs result in additional flexibility, although most tend to provide a benefit that includes fewer total days off. For healthy employees, PTO can result in more vacation time when compared to a plan that differentiates sick leave and vacation. On the other hand, employees that exhaust sick time under traditional systems will generally have fewer total days available for leave.   

Holiday Time Off

It is common for cities to provide paid time off for holidays that are held on what would normally be a workday for full-time employees. These are often offered separately from other types of leave programs but could also be incorporated into a PTO system. Each city can make its own determination as to which holidays to recognize and provide as paid time off. Policies should also detail what happens if the holiday falls on non-workday such as a weekend. It is common (but not required) for holidays that fall on a Saturday to be observed on the preceding Friday and for holidays that fall on Sunday to be observed on the following Monday. It is becoming increasingly common to include a limited number of flexible holidays within a traditional paid time off program. Flexible holidays can allow employees the ability to schedule time off for holidays of importance to the employee or in some systems function as additional time off and functions similar to PTO or vacation time. Flexible holidays are usually offered as a “use it or lose it” type of benefit and thus are not allowed to be carried over from year to year.

Types of Required Leave

Cities are obligated to provide paid military leave, which provides for a 30-day paid leave of absence for certain types of employees activated for military service. The Family and Medical Leave Act (FMLA) allows employees to take up to 12 weeks of job-protected unpaid leave in a 12-month period for specified family and medical reasons. FMLA also allows up to 26 weeks of leave to care for a covered servicemember (Military Caregiver Leave). All cities must comply with FMLA; however, city employees are not eligible for FMLA leave if a city has fewer than 50 employees. Employers are also required to allow time off for jury duty but there is no requirement for this to be paid unless a current policy or past practice is to pay for jury duty.

Payoff

It is important to describe what happens to accumulated leave when employment ends. Unless required to do so under an employment contract, collective bargaining agreement or personnel policy, an employer is not required to pay employees for accrued leave when they leave employment. However, it is quite common to pay unused vacation or PTO time, while payoffs of unused sick time are rare and generally only available to retiring employees.




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