PTO Policy Template
A comprehensive paid time off policy template combining vacation, sick, and personal days into one flexible bank.
Best for:Companies wanting policy simplicityOrganizations with trust-based culturesEmployers in states without sick leave mandates
Policy Template
Policy Purpose
[Company Name] recognizes the importance of time away from work for rest, personal matters, and health. This Paid Time Off (PTO) policy provides employees with a flexible bank of paid leave that can be used for vacation, illness, personal business, or any other purpose.
Tips:
- • Customize the tone to match your company culture
- • Consider adding your company values around work-life balance
Eligibility
All regular full-time employees are eligible for PTO benefits beginning on their date of hire. Part-time employees working [20+] hours per week are eligible for prorated PTO benefits. Temporary and contract employees are not eligible for PTO under this policy.
Tips:
- • Define your threshold for part-time eligibility
- • Consider if you want a waiting period before accrual begins
PTO Accrual
PTO accrues based on years of service according to the following schedule:
• 0-2 years: [X] hours per pay period ([X] days annually)
• 3-5 years: [X] hours per pay period ([X] days annually)
• 6-10 years: [X] hours per pay period ([X] days annually)
• 10+ years: [X] hours per pay period ([X] days annually)
PTO begins accruing on the first day of employment and is available for use after [30/60/90] days.
Tips:
- • Benchmark against your industry
- • Consider front-loading for simplicity
Accrual Cap
Employees may accrue PTO up to a maximum of [1.5x] their annual accrual rate. Once this cap is reached, accrual will stop until PTO is used. Employees approaching their cap will be notified and encouraged to schedule time off.
Tips:
- • 1.5x annual accrual is a common cap
- • Consider seasonal workload when setting caps
Requesting PTO
Employees should request PTO through [system/manager] as far in advance as possible:
• Planned absences (vacation): Minimum [2 weeks] notice
• Unplanned absences (illness): Notify manager before shift start
Requests will be approved based on business needs, team coverage, and request timing. In cases of conflicting requests, approval may be based on seniority or first-come basis.
Tips:
- • Be specific about your request process
- • Define how conflicts are resolved
Carryover
Employees may carry over up to [X] hours of unused PTO to the following calendar year. Any hours exceeding the carryover limit will be forfeited on [December 31/anniversary date]. Employees will be notified of upcoming forfeiture [30] days in advance.
Tips:
- • Check state law - some states prohibit forfeiture
- • Consider a payout option instead of forfeiture
PTO Upon Termination
Upon voluntary or involuntary termination, employees will be paid for all accrued, unused PTO at their current rate of pay. This payout will be included in the final paycheck in accordance with state law.
Tips:
- • Check your state law on payout requirements
- • Be consistent in application
Customization Points
When using this template, customize these key areas for your organization:
- →Accrual rates by tenure level
- →Waiting period before use
- →Accrual cap amount
- →Carryover limits
- →Request notice periods
- →Part-time eligibility threshold
Legal Considerations
- ⚠️Some states prohibit use-it-or-lose-it policies
- ⚠️Many states require PTO payout at termination
- ⚠️Sick leave laws may require separate tracking
- ⚠️Ensure policy does not discriminate
This template is for informational purposes only. Consult with an employment attorney to ensure your policies comply with applicable federal, state, and local laws.
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