Should Your Small Business offer PTO?

You may wonder about your obligations and rights pertaining to paid time off (PTO) policies. Are you required to offer it?  When it comes to paid time off policies and whether you need to offer it or not, here is what you need to know.

First, let’s cover what paid time off (PTO) is. It is exactly as it sounds – time off for employees so they can be out of the office and focus on their personal lives while they still receive a paycheck.

A paid time off policy differs from a vacation policy in that PTO is often used when companies have one time bank that employees are allowed to charge against, covering everything from sick days to vacation and personal days. Vacation time off is only used for vacation or personal time and does not cover sick days or other days off, such as for bereavement.

Is it mandatory that small business employers offer paid time off? The answer is… maybe.

According to the US Department of Labor, no federally mandated requirement exists for businesses of any size to offer paid time off policies; however, it may be required by your business in your state.

Paid time off laws vary by state, which makes it of utmost importance that you as a small business owner look into your specific state requirements – if there are any. PTO offerings may vary between locations within the state as well as industries and other variables. 

It is best to reach out to your state department of labor website to determine the most current legislation in your state pertaining to paid time off policy.

Yet, even if you are not required by your state to offer a PTO policy, it is usually still a good idea to as employees are much more attracted to working for companies that offer these important benefits. Plus, as we learn more about work/life balance, a generous PTO plan may end up helping your bottom line as well!