Understand Paid Time Off (PTO) for Your State and Federal Laws

Updated
This information is for general guidance and is not legal advice. For specific questions, it is best practice to consult a lawyer, CPA, or professional advisor.

PTO Laws in Canada 

If you operate in Canada, you must follow federal and provincial paid leave laws:

  • 2 weeks of vacation after 1 year of employment (4% vacation pay).
  • 3 weeks after 5 years (6% vacation pay).
  • 4 weeks after 10 years (8% vacation pay).
  • Any unused vacation must be paid out upon termination.


PTO Laws in the U.S.

Your PTO policy should comply with state and federal regulations to ensure fairness and legal compliance. Some time off requests are non-negotiable, especially when they involve Family and Medical Leave Act (FMLA) or any state mandates, and must be granted.

Currently, most U.S. employers are not federally required to provide paid leave. However, the FMLA entitles eligible employees to unpaid leave with job protection for personal or family health conditions, caring for a new child, and other qualifying circumstances.

Be sure to review your state's laws and codify them into your PTO policies.

For more details on paid sick leave laws, visit the U.S. Department of Labor's website.

Setting Up a PTO Policy 

With 7shifts, you can create and manage custom PTO policies that meet your legal requirements. A well-structured PTO policy should outline:

  • Accrual rules – how employees earn PTO over time.
  • Usage limits – how much time off employees can take within a given period.

⚠️ Important note on Accrual: When you enable an accrual policy, PTO accrual begins for all assigned employees on January 1st of the current year, regardless of when you created the policy or the employee's hire date.

For example, as of Jan. 1, 2024, Minnesota’s Earned Sick and Safe Time (ESST) law requires employers to provide paid leave to employees who work in the state. The steps below provides instructions on creating a Minnesota ESST-compliant policy in 7shifts:
  1. Login to the web app as an Admin.
  2. Go to Settings > Company Settings.
  3. Select the Time Off tab.
  4. Enable Sick Paid Time Off settings > Save.
  5. Click + Create Policy.
  6. Fill in the policy details. The Minnesota ESST law requires that employees accrue at least one hour of sick leave for every 30 hours worked.
    • Choose Hourly Accrual.
    • Set the accrual rate to 1 hour per 30 hours worked.
    • Set the Maximum accrual to at least 48 hours per year (employers may allow more).
    • Set Maximum Carryover to 80 hours.
    • Set Waiting period for earning to 0.
  7. Click Save.
  8. Once the Minnesota ESST policy is created, Admin users can manage and assign employees in bulk or individually within an employee profile.

Click on the image to expand it. 

RELATED ARTICLES

Paid Time Off (PTO) in 7shifts
PTO: Create Time Off Policies
Where Can I Find My State's Labor and Employment Laws ?

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