PTO (paid time off)

The no-mandate baseline and what fills it

The US is the only country in this glossary with no statutory paid annual leave. Market practice fills the gap unevenly: salaried professionals commonly receive 15 to 25 PTO days plus holidays, while large portions of the hourly workforce receive little or none. The state layer is growing fast on the sickness side specifically, with around 21 states plus DC mandating accrued paid sick leave by 2026, each with its own accrual rates and carryover rules, and dozens of cities on top.

The rules that bite on exit

Whether accrued PTO must be paid out at termination is state law: California, Colorado, Montana and Nebraska treat accrued vacation as earned wages that cannot be forfeited (capping accrual is allowed; use-it-or-lose-it is not), while other states let policy decide. Multi-state PTO policies that ignore this distinction misstate liabilities on every balance date and get corrected, expensively, at exits.

Unlimited PTO, honestly assessed

Unlimited PTO removes the accrual liability and markets well, and the data pattern is consistent: without norms and manager modelling, employees under unlimited policies often take less leave, not more, while losing the payout an accrued bank would have owed them. If the goal is rest and retention, minimum-usage expectations and visible leadership behaviour matter more than the policy label. If the goal is balance-sheet hygiene, say so internally and design accordingly.