The Fair Labor Standards Act (FLSA) does not require employers to provide paid time off for vacation, sick time, or holidays; however, many states do. Subject to state law requirements, you can set your own policy for vacation and other paid time off; however, when you do offer vacation, you need to offer it equitably and cannot discriminate based on race, gender, religion, or other protected characteristics. You can set different vacation allowances based on the number of years of service and on job title/level. For example, managers can receive more vacation time than other employees.

Many employers now offer a bank of paid time off (PTO) days that include vacation, personal, and sick days. Company policy and state law dictate how employees accumulate these days. Some companies have PTO days accrue each month based on hours worked, while others give a certain number of days each year based on the number of years at the company.

According to the Bureau of Labor Statistics (BLS), more than 70 percent of workers in private industry and 55 percent of workers in the service industry are given paid vacation days. Establishing a competitive time off policy at your company is a great way to attract and retain talent.

Did you know that employers are required to allow workers time off for certain things, like voting, jury duty, family and medical leave, pregnancy leave, and military leave? These are mandated by federal, state, and local law.

A PEO can help you follow applicable guidelines for time off at your company, and assist in developing company policies and employee handbooks. Other options for staying current and compliant with guidelines include using a payroll provider and outsourcing your HR services.