Run: Vacation and PTO Policy

This policy establishes how employees accrue and use vacation/PTO, how requests are scheduled and approved, and how unused balances are handled during carryover, cash-out, and termination. The policy is intended to support business continuity while providing a fair and consistent time-off benefit.

This policy applies to all eligible employees of the policy holder, unless a written exception is approved by Human Resources. It does not create a contract of employment and may be modified at any time, subject to applicable law. Where state or local law provides greater employee rights, the law controls.

Eligible employees begin accruing PTO on the date specified by the policy holder, such as the first day of employment or after a waiting period. Accrual may be based on length of service, pay period, or hours worked. The policy holder should specify: - Accrual rate by tenure or employee group - Whether accrual is capped at a maximum balance - Whether PTO accrues during paid leave, unpaid leave, or periods of absence - Whether exempt employees accrue on a different schedule than nonexempt employees Accrual must be administered consistently and in a manner that complies with applicable wage and hour laws, including the FLSA for proper classification and overtime treatment.

Employees must request PTO in advance through the designated HR or timekeeping system whenever practicable. Requests should include the dates requested, anticipated return date, and any operational considerations. Managers should review requests in good faith and approve or deny based on staffing needs, business operations, and fairness among employees. The policy holder may establish: - Minimum advance notice requirements - Peak season or blackout dates - Maximum consecutive days off - Rules for partial-day PTO requests - Procedures for emergency or unforeseeable absences PTO scheduling must not be used in a way that interferes with protected leave rights under the FMLA, ADA reasonable accommodation obligations, or rights protected by the NLRA.

The policy holder should state whether unused PTO carries over from one year to the next and, if so, the maximum amount that may be carried over. Any carryover cap, forfeiture rule, or use-it-or-lose-it provision must comply with applicable state law. Some jurisdictions restrict forfeiture of accrued vacation/PTO or require payout of unused balances. If carryover is allowed, the policy should specify: - The carryover limit - The date by which carried-over PTO must be used - Whether balances above the cap stop accruing until the balance is reduced - Whether exceptions may be approved for business reasons or protected leave

If the policy holder permits PTO cash-out, the policy should define when cash-out is available, who is eligible, how often requests may be made, and whether approval is discretionary. Cash-out may be limited to certain times of year or subject to minimum remaining balance requirements. Any cash-out program must be administered consistently and in compliance with applicable wage payment laws and tax withholding requirements.

Upon separation from employment, unused PTO will be handled according to applicable law and company policy. In some jurisdictions, accrued but unused PTO must be paid out in the final paycheck; in others, payout depends on written policy. The policy holder should specify: - Whether payout applies to voluntary resignation, involuntary termination, retirement, or death - Whether payout is based on accrued balance only, excluding unearned or advanced PTO - The timing of final payout under applicable wage payment laws - Any deductions or offsets allowed by law California employees: accrued vacation/PTO is treated as wages under California Labor Code § 227.3 and must be paid out at separation, subject to lawful calculation rules. Other state-specific final pay rules may also apply.

Employees are responsible for submitting timely PTO requests, accurately recording time off, and notifying their manager of unexpected absences as soon as practicable. Managers are responsible for reviewing requests fairly, maintaining staffing coverage, and escalating conflicts to HR when needed. HR is responsible for administering the policy, maintaining records, and ensuring compliance with applicable law. Payroll is responsible for processing PTO payouts, cash-outs, and final pay in accordance with approved records and legal deadlines.

This policy must be applied consistently and without discrimination in accordance with EEOC requirements, including Title VII of the Civil Rights Act of 1964. The policy holder must also consider reasonable accommodation requests under the ADA through the interactive process and protected leave rights under the FMLA. Employees who misuse PTO, falsify time records, or fail to follow reporting procedures may be subject to corrective action, up to and including termination, consistent with a documented warning or PIP where appropriate. Exceptions must be approved in writing by HR or another authorized policy holder representative. Nothing in this policy limits employees' rights to engage in protected concerted activity under Section 7 of the NLRA.

This policy will be reviewed at least annually and updated as needed to reflect changes in business practice, payroll systems, and applicable federal, state, and local law. Any revision should be communicated to employees in writing, and acknowledgements should be collected when material changes are made.