PTO vs. Sick Time: What Employers and Employees Must Know

PTO vs. Sick Time: What Employers and Employees Must Know

Understanding the differences between Paid Time Off and Sick Leave.
4/10 Work Schedules

Paid Time Off (PTO) and sick time are vital tools for employers aiming to build a strong, healthy workforce. They're not just perks; they play a critical role in attracting skilled professionals, reducing burnout, and preventing the spread of illness in the workplace. For employers, understanding the nuances of PTO and sick time is key to maintaining a productive, satisfied team. In this article, we'll explore why these benefits are important from an employer's perspective and how they can be effectively managed. Let's delve into the essentials of PTO and sick time.

What IS PTO?

PTO, or Paid Time Off, is a crucial aspect of an employee's benefit package, especially from an employer's standpoint. Fundamentally, it's an allocated number of days during which employees can take time away from work while still receiving their regular pay. Employees can take PTO for a variety of reasons, such as:

  • Vacation Time: Allowing employees to recharge and enjoy leisure time away from work.
  • Family Time: Providing opportunities for employees to spend quality time with loved ones.
  • Childcare Needs: Enabling parents to attend to their children’s needs, such as school events or appointments.
  • Observing Holidays: Both national and religious holidays can be observed without work commitments.
  • Personal Time: Addressing personal issues or emergencies that may arise unexpectedly. Addressing personal issues or emergencies that may arise unexpectedly.

Tip: Consider using a PTO tracker—it helps you easily keep track of each employee's used and remaining time off.

Types of PTO

For employers, selecting the right PTO policy is a balance between offering flexibility to employees and meeting business objectives. Different PTO systems cater to diverse workplace needs and preferences. To make an informed decision, it's important to understand the three main types of PTO policies available: Accrued PTO, PTO Bank system, and Unlimited PTO.

Each has its unique structure and implications for both the employer and the employee. Let's take a closer look at these policies.

Types of PTO Policies

Unlimited PTO

This modern approach offers employees the freedom to take as much time off as they need, provided their work isn't negatively impacted. Unlimited PTO is designed to promote a healthy work-life balance and reduce stress, potentially enhancing employee retention.

Accrued PTO

This system allows employees to accumulate PTO over time. For instance, an employee might earn five days of PTO every three months. The key here is that employees can only use the amount of PTO they have accrued. Many organizations allow accrued PTO to roll over to the next year, though there might be a cap on the maximum accrual.

PTO Bank System

Here, employees receive a fixed number of PTO days annually, which they can use at their discretion. Employers might restrict the usage of PTO during the initial employment period. A distinctive feature of this system is the ‘use-it-or-lose-it’ policy, where unused days don't carry over to the next year, encouraging employees to take their allotted time off.

The Importance of Tracking PTO

Tracking Paid Time Off (PTO) is more than just a good practice; it's a necessity. From a legal standpoint, it helps companies stay in line with labor laws, avoiding any legal issues. On a practical level, it's about knowing who's available for work and when which is essential for smooth operations.

For employees, keeping track of PTO means they can plan their time off without confusion, ensuring they get the rest they're entitled to. Simply put, accurate PTO tracking keeps everything fair and clear for everyone involved.

Track PTO with Ease using OnTheClock!

Simplify Your Team's Time Off in Just a Few Clicks!"

Benefits of PTO for Employees

PTO, or Paid Time Off, offers numerous advantages for employees, enhancing their overall well-being and work-life quality. Here’s a closer look at the benefits:

  • Improved Physical Health: Regular vacations help lower stress, which in turn reduces the risk of heart disease and high blood pressure.
  • Enhanced Mental Health: Time off can alleviate stress, leading to better mental well-being and lower risks of anxiety and depression.
  • Greater Overall Well-Being: Regular travelers tend to have higher well-being scores, showing the positive impact of frequent breaks.
  • Increased Motivation and Productivity: Employees often return from PTO with renewed focus and motivation, improving their work performance.
  • Strengthened Family Relationships: Spending quality time with family during vacations can enhance personal relationships.
  • Reduced Burnout: Regular time off helps prevent employee burnout, leading to greater creativity and productivity in the workplace.
  • Boosted Happiness: The anticipation of a vacation can elevate an employee’s mood, contributing to overall happiness.

What is Sick Time

Sick time, often referred to as sick leave, allows individuals to take paid leave from work to manage their health and recuperate from illness.

Unlike PTO or vacation time, which can be used for various personal reasons, sick time is specifically allocated for health-related absences. This includes both sudden illnesses and planned medical appointments, allowing the employee not to have to choose between their health and their paycheck.

While there is no federal mandate for paid sick leave in the United States, the Family and Medical Leave Act (FMLA) requires qualifying employers to provide up to 12 weeks of unpaid sick leave for certain medical conditions affecting the employee or their immediate family.

Eligibility for FMLA depends on several criteria, including a minimum of 12 months' employment, at least 1,250 hours worked in the previous 12 months, and employment at a location with 50 or more employees within a 75-mile radius.

Pros and Cons of Sick Time

Allocating specific sick days as part of a sick time policy has both advantages and disadvantages:


  • Health Prioritization: Allocating specific sick days emphasizes the value of an employee's health, ensuring that illnesses don't encroach on personal or vacation time.
  • Encourages Honesty: A separate sick time policy can lead to more honesty from employees about their health, reducing the likelihood of coming to work ill.
  • Prevents Workplace Illness: Discouraging sick employees from coming to work, it minimizes the risk of spreading illness in the workplace.
  • Mental Health Benefits: Differentiating sick time from vacation time can alleviate hesitancy in taking mental health days or vacations.


  • Administration Complexity: Managing a separate sick time policy can add administrative complexity and increase the workload for HR departments.
  • Potential for Misuse: Healthy employees might see separate sick and vacation time as an opportunity to extend their personal time off, especially if they are keen on using all allocated days.

Sick Time vs Personal Days

Sick time and personal days, while similar, serve distinct purposes in employee leave policies. Sick time is specifically reserved for health-related absences, including both sudden and chronic illnesses, as well as medical appointments. This dedicated sick leave ensures employees can focus on their health without impacting their other forms of leave.

On the other hand, personal days offer a broader scope of use, encompassing a variety of personal needs beyond health concerns. These might include attending to family emergencies, fulfilling civic duties like jury duty, or managing life events such as moving house or attending significant personal occasions. The flexibility of personal days accommodates the diverse and unpredictable nature of personal obligations.

By offering both sick time and personal days, employers can provide a comprehensive leave package that respects and responds to the multifaceted needs of their workforce.

The Difference between PTO vs Sick Time

Understanding the key differences between PTO (Paid Time Off) and sick time is crucial for both employers and employees. These differences significantly impact company policy and employee benefits.

  • Flexibility of Use: PTO is versatile, available for vacations, personal days, or sick leave, while sick time is strictly for illness or caring for a sick family member.
  • Predictability: PTO is often scheduled in advance for planned absences like vacations, whereas sick time is typically unplanned, catering to sudden illnesses or emergencies.
  • Documentation Requirements: Sick time often requires a doctor's note or proof of illness, which is not a standard requirement for PTO.
  • Payout Policies: Upon leaving a company, employees may receive compensation for unused PTO, but this is usually not the case for unused sick time.
PTO vs Sick Time

Exploring Other Types of Leave

Beyond PTO and sick time, there's a spectrum of leave types that cater to diverse employee needs. This section explores these various leaves, each with its unique purpose and application within workplace policies.

Maternity and Paternity Leave

Maternity and paternity leave, essential for new parents, involves allocated paid or unpaid time off following the birth or adoption of a child. Legally, under the Family and Medical Leave Act (FMLA), eligible employees can take up to 12 weeks of unpaid leave. Employer best practices often extend beyond these legal requirements, with some offering paid leave to support new parents.


Bereavement leave provides employees with time to grieve the loss of an immediate family member, acknowledging the need for a period of mourning.

Jury Duty

Jury duty is a civic obligation that employers must accommodate, regardless of an employee's tenure. The Jury Systems Improvement Act mandates that employers provide unpaid leave for employees serving in federal courts. While there's no federal requirement to compensate employees for this time, some companies choose to offer paid leave as part of their benefits package.

Disability Leave

Disability leave is a critical aspect of employee rights, allowing time off for those unable to work due to illness, injury, or impairment. Under the Americans with Disabilities Act (ADA), this leave encompasses the right to take a leave of absence or to receive reasonable accommodation.

Holiday Time Off

Holiday leave allows employees to take time off during nationally recognized holidays. While federal and state governments designate certain days as holidays, there is no federal mandate for employers to provide paid time off on these occasions. The decision to offer paid holiday leave is at the discretion of employers. This practice varies widely, with some businesses choosing to recognize a broader range of holidays, including state-specific or religious observances.

Concluding Insights on PTO and Sick Time

Paid Time Off (PTO) and sick time are really important for a great workplace. They're not just extra benefits but key parts of a job that keep employees happy and healthy. For bosses, it's important to get these policies right to keep the team working well and feeling good. For workers, these benefits mean they can take a break when they need to, without stress. In the end, good PTO and sick time policies make everyone in the workplace happier and more productive. As jobs keep changing, these benefits will become even more important.

Frequently Asked Questions About PTO and Sick Time


For full-time employees, the average PTO is typically around 10-14 days per year after one year of service. This average increases to about 15-19 days per year once an employee has accumulated 10 years of service.?


If you don't use your Paid Time Off (PTO), several things can happen, depending on your employer's specific policy:

  • Rollover: Some companies allow unused PTO to roll over into the next year. There might be a limit to how much can carry over.
  • Payout: In certain cases, employers may offer a payout for unused PTO at the end of the year or upon termination or resignation.
  • Forfeiture: In a "use-it-or-lose-it" policy, any PTO not used by the end of the year is forfeited without compensation.
  • Accrual Cap: Some employers set a cap on how much PTO can accrue. Once you hit the cap, you stop accruing more days until you use some of your accumulated time.

No, companies in the United States are not legally required to provide Paid Time Off (PTO) to their employees. The decision to offer PTO, including vacation, sick leave, or any other form of time off, is at the discretion of the employer.

While many companies choose to offer PTO as a benefit to attract and retain employees, it's not mandated by federal law. Some states and local jurisdictions may have specific laws regarding sick leave, but these do not typically extend to general PTO.


Yes, you should definitely track your time off. Keeping a personal record of your used and remaining Paid Time Off (PTO), sick days, and any other types of leave has several benefits:

  • Accurate Record: It ensures you have an accurate count of your available days, which can sometimes differ from your employer's records due to errors or misunderstandings.
  • Planning: It helps in planning your leaves better. Knowing how much time off you have available can assist in scheduling vacations, appointments, or personal days more effectively.
  • Avoiding Loss of Benefits: In companies with a "use-it-or-lose-it" policy, tracking your time off can prevent you from losing unused days at the end of the year.
  • Dispute Resolution: If there's ever a discrepancy between your records and those of your employer, your personal tracking can serve as evidence to resolve the issue.
OnTheClock Employee Time Tracking

Written by

OnTheClock Team

OnTheClock is the perfect app for business that want to keep track of their employees' time without spending hours doing it. With OnTheClock, you can forget about the old way of doing things.

Do you want to know more about how OnTheClock works?

Leave Your Thoughts...

(required, will be shown)
(required, will not be shown)