Standard Vacation Policies

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When establishing a vacation policy for your business, it is important to assess both your company’s needs and your employees' needs, as well as any legal requirements. Vacation time is a potential benefit that can entice better job applicants to a company and can help existing employees relax and refresh so that they are more efficient workers.


In the United States, there is no legal requirement to offer vacation time to employees, according to the Fair Labor Standards Act (FLSA). The federal government’s only mandated time off falls under the Family Medical Leave Act (FMLA). This particular law requires that employers offer employees up to 12 weeks of unpaid time off each year that they meet certain requirements. These requirements include their own health concerns that prevent them from working, a sick family member, or the birth or adoption of a child.

Number of Vacation Days

Many companies offer two weeks of vacation to employees. Some companies increase this as the employee accumulates more time at the company. For example, after five years of employment, the employee may have their vacation time bumped up to three weeks per year. Then after ten years of employment, it may be bumped up to four weeks per year.


Some companies group all paid time off into one category, usually called Paid Time Off (PTO). Companies that choose this method don’t separate sick time from vacation time, as companies were more likely to do in the past. With this practice, employees have one lump sum of days to use for illnesses, vacations, family emergencies, funerals or other reasons. Employers may also choose to allow employees to roll over unused time off into following years. However, they may put a limit on the number of days or hours that may be carried forward. Some employers have a "use it or lose it" policy when it comes to paid time off.

Other Considerations

Employers typically do not offer paid vacation to part-time employees. However, if a company employs many part-time employees that are considered essential to the operation of the workplace, it is something to seriously consider doing, probably on a pro rata basis. To ensure that company operations continue working smoothly, companies should put in place methods for requesting vacation leave that ensure not all essential personnel are absent at the same time.