What is a PTO accrual cap?

A PTO accrual cap (or ceiling) limits how much PTO can accumulate. **How It Works:** - Employee accrues PTO normally - Once cap is reached, accrual stops - Taking time off restarts accrual - Does NOT forfeit existing balance **Common Cap Levels:** - 1x annual accrual: Can bank one year's worth - 1.5x annual accrual: Most common approach - 2x annual accrual: More generous **Example:** - Annual accrual: 120 hours - Cap: 180 hours (1.5x) - Once at 180, no more accrual until time is used **Why Employers Use Caps:** - Limits financial liability - Encourages regular time off - Prevents excessive absence requests - More sustainable than use-it-or-lose-it **Legal Considerations:** - Generally legal in all states (unlike use-it-or-lose-it) - California allows caps but not forfeiture - Must still pay out all accrued PTO at termination **Best Practice:** Set caps at 1.5x annual accrual and notify employees when approaching the cap so they can plan time off.