PTO Act
The Protected Time Off Act (PTO Act) would require most employers to provide paid annual leave to covered employees. The leave accrues at 1 hour for every 25 hours worked, with a maximum of 80 hours per 12-month period, starting at the employee’s start date. Leave can be used for any purpose and must be paid at the employee’s regular rate (with enhanced rules for tipped workers). Employers must give notice of the policy, track accruals, and allow reasonable scheduling, while prohibiting retaliation or using leave as a factor in hiring, promotion, or discipline. If an employee leaves the job, unused leave must be paid out at the higher of the three-year average rate or the final rate; if the employee is rehired within a year, unused leave can be reinstated. The act also creates enforcement mechanisms, including a private right of action and federal enforcement by the Secretary of Labor, with remedies including damages, interest, and attorney’s fees. It preserves stricter state/local laws and collective bargaining agreements that confer greater or separate protections.
Key Points
- 1Accrual and cap: Employers must provide at least 1 hour of paid annual leave for every 25 hours worked, up to a maximum of 80 hours of leave per employee per 12-month period, with accrual starting at hire.
- 2Use and pay: Leave can be used for any purpose; the employee is paid at the regular rate (with specific higher-wodges for tipped employees). Leave can be loaned in advance, and carries over up to 40 hours. Employer benefits continue during leave.
- 3Scheduling and notice: Employers may impose limited, reasonable scheduling restrictions for bona fide business reasons, must offer reasonable alternatives within 30 days, and must provide written denial notices with the reason and alternatives within 5 business days. Employees do not need to reveal the purpose of the leave; notice for use should be given by the employee, with the Secretary providing sample notices.
- 4Separation and rehiring: Upon separation, unused leave must be paid out at the higher of the employee’s average rate over the last 3 years or the final rate. If rehired within 12 months, unused leave over 80 hours must be reinstated, and the employee can resume using and earning leave.
- 5Enforcement and remedies: The Act authorizes enforcement by the Secretary (with powers similar to the FLSA), a private right of action for employees, damages (including up to 80 hours of wages, interest, and liquidated damages), and attorney’s fees. It also allows state and federal enforcement in parallel and includes arbitration/grievance options under collective bargaining agreements.