Defining and Exploring Paid Time Off Programs

Paid time-off policies compensate employees when they are not performing their primary work duties. In the private sector, most paid time-off benefits are offered at an employer’s discretion, with nonunion workplaces following custom and unionized workplaces specifying provisions in collective bargaining agreements. Common paid time-off programs include holidays, vacation, sick leave, personal days, integrated leave policies, and bereavement leave.

Federal and state laws govern some areas, such as jury duty leave, military leave, and unpaid leave under the Family and Medical Leave Act of 1993. Paid time-off benefits are valued by both employees and employers because they support work–life balance, reduce unapproved absenteeism, and encourage positive employee attitudes and commitment. The length of paid time off, such as vacation, can increase substantially with length of service.