A growing number of state and local jurisdictions are passing laws requiring employers to provide paid leave to employees. When new laws are enacted, employers may have questions about how they will affect their existing policies, including those related to time off. To help, here are answers to some frequently asked questions on paid sick leave, vacation time and paid time off (PTO).
KEY POINTSUnderstanding rules governing paid leave:
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Q: Where is paid vacation time required?
A: Absent an employer’s promise otherwise, no federal or state law requires employers to provide paid vacation time specifically. However, a handful of states and local jurisdictions have enacted laws requiring employers to provide paid leave that employees can use for any purpose, including vacation. These states and local jurisdictions include the following.
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State |
Employers who must provide paid leave used for any reason |
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Illinois |
Statewide: All employers must provide paid leave that employees can use for any purpose, including vacation, unless the employer is covered by a municipal or county ordinance that was in effect on January 1, 2024 that requires employers to give any form of paid leave to their employees. Chicago: All employers with at least one covered employee working in Chicago must provide employees with paid leave that they can use for any reason, including vacation. |
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Maine
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Employers with 10 or more employees must provide paid leave that employees can use for any purpose, including vacation. |
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Nevada
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Employers with 50 or more employees must provide paid leave that employees can use for any purpose including vacation. |
Additionally, in California, the city of West Hollywood requires employers to provide paid leave that employees can use for sickness, vacation, and/or personal necessity. In New Mexico, Bernalillo County requires employers in unincorporated areas to provide paid leave that employees can use for any reason, including vacation.
Many employers offer at least some paid vacation time to employees even if they aren’t required to do so. In fact, among private-sector employers with one to 49 employees, 71 percent of all employees have access to this benefit, according to the Bureau of Labor Statistics (BLS).
Q: Why do employers offer paid vacation time even if they aren’t required to do so?
A: Offering paid vacation time can help employers demonstrate their commitment to their workforce, attract and retain employees, and remain competitive in the marketplace. Paid vacations can also boost productivity and help reduce unscheduled absences by giving employees the ability to schedule their time off.
Q: Where is paid sick leave required?
A: As of May 2026, the following state and local jurisdictions require employers to provide paid sick leave to employees.
Statewide and district-wide paid sick leave requirements
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State or district |
Which employers must provide paid sick leave? |
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Alaska
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All employers |
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Arizona
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All employers |
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California
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All employers |
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Colorado
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All employers |
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Connecticut
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Employers with 11 or more employees in the state must provide paid sick leave to all employees. Effective January 1, 2027, employers with one or more employees in the state must provide paid sick leave to all employees. |
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District of Columbia
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All employers |
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Maryland
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Employers with 15 or more employees must provide paid sick leave. (Smaller employers must provide sick leave, but it may be unpaid.) |
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Massachusetts
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Employers with more than 10 employees must provide paid sick leave. (Smaller employers must provide sick leave, but it may be unpaid.) |
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Michigan
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All employers |
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Minnesota
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All employers |
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Nebraska
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Employers with 11 or more employees must provide paid sick leave.
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New Jersey
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All employers |
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New Mexico
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All employers |
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New York
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Employers with five or more employees or a net income of more than $1 million must provide paid sick leave. (Other New York employers must provide sick leave, but it may be unpaid.) All New York employers must provide up to 20 hours of paid prenatal personal leave to eligible employees. The required paid prenatal leave is in addition to the sick leave requirements. |
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Oregon
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Employers with 10 or more employees (six or more if they have a location in Portland) must provide paid sick leave. (Smaller employers must provide sick leave, but it may be unpaid.) |
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Rhode Island
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Employers with 18 or more employees must provide paid sick leave. (Smaller employers must provide sick leave, but it may be unpaid.) |
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Vermont
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All employers |
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Virginia
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Currently, only home-health workers are entitled to paid sick leave under state law. |
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Washington
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All employers |
Local jurisdictions with paid sick leave requirements
More than 20 local jurisdictions have their own paid sick leave requirements. The following local jurisdictions require paid sick leave. If your business or employees are located in one of these areas, check the law for information on employer coverage and other details.
- California cities: Berkeley, Emeryville, Long Beach (hotels with 100 or more rooms), Los Angeles, Oakland, San Diego, San Francisco, Santa Monica, and West Hollywood*
- Chicago
- Montgomery County, Maryland
- Minnesota cities: Minneapolis and St. Paul
- New York City
- Pennsylvania cities and county: Philadelphia and Pittsburgh, and Allegheny County
- Washington cities: Seattle, SeaTac (hospitality and transportation industries), and Tacoma
* In West Hollywood, employers must provide full-time employees with up to 96 hours of paid leave per year that they can use for sickness, vacation, or personal necessity. If the employee exhausts their paid leave, they are entitled to up to 80 hours of uncompensated leave for their own sickness or a family member’s. Part-time employees are entitled to prorated amounts of paid and unpaid leave.
Q: What is the difference between a paid vacation policy, paid sick leave policy, and a paid time off (PTO) policy?
A: Instead of having separate policies for vacation, sick, and other types of leave, many employers offer a single PTO policy under which employees can use accrued time off for any purpose. For example, you may offer 14 days of PTO per year that employees can use for any reason. Under this policy, one employee could use 10 days for a vacation, another three days when they get sick later in the year, and the remaining time off to care for their child, whose school was closed due to the weather. Other employees may use the time differently to meet their specific needs and circumstances.
Q: My state paid sick leave law allows me to provide leave through PTO. One of my employees just requested sick leave, but they've exhausted their PTO for the year. Do I have to offer additional paid sick leave to this employee?
A: Under many of the paid sick leave laws, no additional paid sick leave would be required if the PTO policy:
- Allows employees to use the same amount of leave for the same purposes and under the same conditions as required by the sick leave law; and
- Satisfies the accrual, carry over, and use requirements of the sick leave law.
When implementing your PTO policy, to help your employees manage their time off, clearly communicate what they can use PTO for, how it accrues, available balances, and the other requirements of your plan.
Depending on the circumstances, the employee here may qualify for sick leave (typically unpaid) under a different law. For example, the federal Family and Medical Leave Act requires employers with 50 or more employees to provide unpaid leave to eligible employees for specified family, medical, and military reasons. Many states have similar laws that cover employers with fewer employees. Check your applicable laws to ensure compliance.
Q: On average, how many paid vacation days do employers provide to employees?
A: The number of vacation days granted each year often varies by length of service. As of March 2025, the average number of vacation days that private-industry workers received after one year of service was 11, according to the BLS. After five years of service, the average number of vacation days is 15 among private-industry workers.
A small number of employers offer unlimited vacation time, trusting that employees will use their professional judgment when deciding when and how much time off to take.
Structure vacation programs consistent with your business needs.
Q: Can I adopt a policy that requires employees to forfeit their vacation if they don’t use it by the end of the benefit year?
A: Some states explicitly prohibit policies that force employees to forfeit accrued, unused vacation time or PTO (also known as use-it-or-lose-it policies). In these cases, employers must generally allow employees to carry over accrued but unused vacation time/PTO from year to year, or pay employees for the unused time at the end of the year.
For example, under California law, earned vacation time and PTO are considered wages, vest as labor is performed, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination.
Several other states have similar rules. In some other states, employers are allowed to have use-it-or-lose-it policies only if the company has a written policy communicating the rule to employees. Check the rules in your state for details.
Q: My state requires me to provide paid sick leave to employees, but I already provide PTO. Do I need a stand-alone paid sick leave policy?
A: Under many of the paid sick leave laws, if you have a PTO policy, you generally don't have to provide additional paid sick days to employees if the policy:
- Allows employees to use the same amount of leave for the same purposes and under the same conditions as required by the sick leave law; and
- Satisfies the accrual, carry over, use and other requirements of the sick leave law.
A single PTO policy can be an attractive option for employers that are subject to multiple paid sick leave laws, as long as it meets or exceeds the requirements of the most generous paid sick leave law.
Check your applicable law to ensure compliance.
Q: My state paid sick leave law allows me to provide leave through PTO. One of my employees just requested sick leave, but they've exhausted their PTO for the year. Do I have to offer additional paid leave to this employee?
A: Under many of the paid sick leave laws, no additional leave would be required if the PTO policy met the requirements listed in the answer above.
When implementing your PTO policy, to help your employees manage their time off, clearly communicate what they can use PTO for, how it accrues, available balances, and the other requirements of your plan.
Depending on the circumstances, the employee here may qualify for sick leave (typically unpaid) under a different law. For example, the federal Family and Medical Leave Act requires employers with 50 or more employees to provide unpaid leave to eligible employees for specified family, medical, and military reasons. Many states have similar laws that cover employers with fewer employees. Check your applicable laws to ensure compliance.
Q: What are some advantages and disadvantages of having a PTO policy instead of stand-alone paid sick leave and vacation policies?
A: With a PTO policy, employees are typically able to use their accrued time off for any reason. A PTO policy can also make it easier to track time off. Additionally, a PTO plan can reduce unscheduled absences since employees have more flexibility to schedule their time off in advance, rather than calling in "sick" after they have used all of their vacation time.
Still, sick leave laws don't typically require that employers pay for unused sick leave when an employee leaves the company. Therefore, if you use your PTO policy to meet sick leave requirements, in some states, such as California, you would be required to pay out all unused PTO at the time of separation. This could mean you would face additional costs paying for unused sick time if you bundled your sick leave into your PTO rather than if you offered separate sick leave. In some states, this may also be true if the employer uses a vacation policy to satisfy the sick leave law.
Conclusion
Make sure your vacation, sick leave and PTO policies comply with applicable state and local laws.
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