No, there are no state or federal laws which require employers to offer paid vacation, holiday, or sick leave. Many employers, however, choose to offer these benefits in order to remain competitive as well as to enhance employee morale and wellness.

If employers do offer paid vacation, it must comply with applicable state laws. There is one federal law, the Family and Medical Leave Act (FMLA), which requires certain employers to provide job-protected leave to an employee for events including childbirth and tending to family members who are ill.

It is important to note, however, that the FMLA does not require an employer to pay for this leave. There are many states and jurisdictions which have adopted laws that require an employer to provide some type of leave, typically sick leave.

Additionally, an employer may choose to offer paid leave to an employee as a benefit of their employment.

What States Require Paid Leave to be Provided to Employees?

There are some states that do require employers to provide paid sick leave or family leave, including:

  • Arizona;
  • California;
  • Connecticut;
  • Maryland;
  • Massachusetts;
  • Michigan;
  • Oregon;
  • New Jersey;
  • New York;
  • Rhode Island;
  • Vermont; and
  • Washington.

These laws operate similarly. Under each of these laws, employees must accrue, or accumulate, a required amount of hours prior to being able to take leave.

Every state law restricts the amount of leave an employee is permitted to take in a given year. In addition, each state law addresses the issue of unused leave, which is leave time that an employee is permitted to use but does not use at the end of a certain time frame.

This leave can be carried over into the next year, depending on the carry-over law of the state. Leave laws usually require that employees be paid their regular wages for the time which is taken as leave.

This leave may be used by an employee to care for a family member who is ill or for childbirth related issues, such as the birth itself and child bonding. The majority of these leave laws allow employees to take paid leave for their own illnesses as well.

There are numerous localities which require businesses operating within their borders to provide employees with paid sick leave or medical leave, including localities within:

  • California;
  • Illinois;
  • New York; and
  • Texas.

The paid sick and medical leave laws in these locations are similar in both form and function to the state paid sick and medical leave laws. Certain localities offer more leave than that which is required by the leave law of the state.

If I Offer Paid Leave, What Rules Must I Follow as an Employer?

There are many employers who voluntarily offer paid vacation, holiday, and sick or medical leave to their employees as benefits of employment, as previously noted. In many cases, for easy administration, employers will provide employees with paid time off (PTO).

PTO can generally be used for any of the purposes discussed above, such as:

  • Vacations;
  • Holidays; and
  • Sick or medical leave.

An employer that offers any of the above types of leave should follow the basic employment law principles in administering the leave. In other words, a leave policy should be outlined in the employee handbook.

There is no legal requirement for an employer to have an employee handbook or one that contains a paid leave policy. Having a written leave policy in an employee handbook, however, serves to ensure that an employee is aware of what is required of them when making a request for leave as well as how to make the leave request.

What Kinds of Handbook Guidelines Should Employers Establish?

An employer is not required to adopt its own leave policy. In general, the states that require paid leave allow employers to adopt the state leave policy as their own in order to satisfy the leave requirement.

If an employer chooses to create a leave policy, however, the employer is required to ensure that the policy is not discriminatory. Pursuant to the federal law Title VII of the Civil Rights Act of 1964, an employer is not permitted to discriminate when awarding employment benefits on the basis of:

  • Race;
  • Color;
  • National origin;
  • Religion; or
  • Sex.

It is important to note that the United States Supreme Court recently ruled that sex discrimination includes sexual orientation and gender identity discrimination. This law applies to an employer that has 15 or more employees.

Numerous states have their own laws that prohibit discrimination. These types of laws often cover small workplaces.

Additionally, an employer should adopt certain measures to ensure that the administration of paid leave policies is smooth and uniform, including that:

  • Employers should require an employee to schedule their leave time in advance. The amount of advance notice provided should be sufficient to allow the employer to find another employee to cover for the employee who is taking leave;
    • Additionally, the amount of advance notice should be sufficient to allow the employer to consider any other staffing issues which may arise due to the employee taking leave;
  • Employers should develop a uniformly administered policy to keep track of, or document, leave requests and days taken off; and
  • Employers should encourage their employees to refrain from misusing their paid leave.

What about Accrued Vacation, Overdrawn Vacation, and the Final Paycheck?

When an individual quits or is terminated from their job, there may be questions regarding what happens to the vacation days that the employee accrued. In addition, what happens to the borrowed vacation days that the employee has not yet earned.

The answer to these issues will depend upon the state in which the employee works.

What about Accrued Vacation in Different States?

Different states handle accrued vacation time in different ways. For example, certain states, such as California, consider accrued vacation to be the same as earned wages. Therefore, an individual’s employer is required to reimburse them for the unused days.

Other states, however, such as Florida, do not consider vacation to be wages. Therefore, it is completely at the discretion of the employer whether the employee is paid for their unused days or not.

What about Overdrawn Vacation in Different States?

Similar to accrued vacation, overdrawn vacation is treated differently by different states. There are some states which allow employers to deduct the value of the vacation time from the employee’s final paycheck, so long as the deduction does not drop the employee’s pay below the federal minimum wage.

Other states allow the employer to make the deduction so long as the employee agrees to it in writing. Several states also prohibit employers from recovering the cost of any overdrawn vacation.

Interestingly, the State of California is one of these states, even though it requires the payment of any accrued vacation.

Should I Hire a Lawyer?

If you have any issues, questions, or concerns related to the relevant laws governing accrued vacation or overdrawn vacation time in your area, it may be helpful to consult with an employment attorney. Your attorney can advise you regarding your rights and liabilities related to your vacation time.

If a dispute arises related to your vacation time, your attorney can represent you in court as well as negotiate with your employer, if possible. In addition to your attorney, another good resource is the Department of Labor in your state.