For broader coverage of this topic, see Leave of absence.
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Paid time off, planned time off, or personal time off (PTO), is a policy in some employee handbooks that provides a bank of hours in which the employer pools sick days, vacation days, and personal days that allows employees to use as the need or desire arises. This policy pertains mainly to the United States, where there are no federal legal requirements for a minimum number of paid vacation days (see also the list of statutory minimum employment leave by country). Instead, U.S. companies determine the amount of paid time off that will be allotted to employees, while keeping in mind the payoff in recruiting and retaining employees.
Generally, PTO hours cover everything from planned vacations to sick days, and are becoming more prevalent in the field of human resource management. Unlike more traditional leave plans, PTO plans don't distinguish employee absences from personal days, vacation days, or sick days. Upon employment, the company determines how many PTO hours will be allotted per year and a "rollover" policy. Some companies let PTO hours accumulate for only a year, and unused hours disappear at year-end.[1] Some PTO plans may also accommodate unexpected or unforeseeable circumstances such as jury duty, military service, and bereavement leave.[2] PTO bank plans typically do not include short-term or long-term disability leave, workers compensation, family and medical leave, sabbatical, or community service leave.[3]
It is unclear as to when PTO bank-type plans were first being utilized in the workforce. In a 2010 study conducted by WorldatWork, 44% of 387 companies surveyed said they started using PTO bank-type plans prior to year 2000.[4]
Since 2020, usage of PTO has declined.
^Lee Ann Obringer, HowStuffWorks Money, How Employee Compensation Works, p. 6.
^Salary.com, Creating a Policy for Paid Time Off
^Andrea Lindemann and Kevin Miller, Clasp - Institute for Women's Policy Research, Paid Time Off: The Elements and Prevalence of Consolidated Leave Plans, May 2012.
^Cite error: The named reference WorldatWork was invoked but never defined (see the help page).
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