Paid Time Off (PTO)

HR Glossary for HR Professionals

Glossary of the most common HR terms and acronyms to assist professionals navigating the ever-growing and ever-changing world of HR terminology.

Paid Time Off (PTO)

What is Paid Time Off (PTO)?

Paid time off, or PTO, is time that employees can take off of work while still getting paid regular wages. This does not include times in which an employee is working remotely or telecommuting. Typically, Paid Time Off policies combine vacation, sick and personal days. 

Are companies required to offer PTO by law?

For most, no federally-mandated PTO laws exist, however there are exceptions. For government contract work and federally-supported contract work that falls under the  McNamara O’Hara Service Contract Act (SCA) or Davis-Bacon and Related Acts (DBRA), it may be mandatory to offer paid time off. Each of these acts uses the prevailing local standard for fringe benefits to determine if PTO needs to be offered. So, if the prevailing local standard is to offer PTO, then PTO must be offered.

Related Terms: Unlimited PTO, Family Medical Leave Act

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