Vacation and Leave Policies

By: Mario Hernandez

Senior Legal Counsel to Chairman Joe Esparza 

Vacation and time off from work are benefits that many employers provide at the workplace. These benefits serve to attract future employees and keep current employees happy. These policies can be beneficial to an employer’s working environment, so it is helpful to be familiar with important details associated with them. Also please note that the terms employer and employers in this article refer to those in the private-sector.

Vacation Time

Vacation leave is probably one of the most recognized forms of time off from work. However, it is not mandatory for an employer to provide vacation leave or have a vacation policy. If an employer does have a vacation leave policy, the employer has wide latitude regarding the structure of its policy. For example:

An Employer Can:

• Put a cap on how many vacation days are accrued
• Set rules on how vacation leave will accrue
• Set rules on what categories of employees accrue vacation (i.e. full-time, part-time, temporary)
• Set rules on how much vacation leave will rollover to the next year
• Set rules on how long an employee needs to work at the company before accruing vacation leave
• Decide whether vacation leave will be paid or unpaid

The above is not an exhaustive list of things an employer can define in its vacation policy, but it is an illustration of the flexibility employers have with vacation leave policies.

Sick Leave

Sick leave is another common form of time off from work. Paid sick leave is not mandatory, but some amount of approved, job-protected, unpaid leave could be required by covered employers pursuant to laws such as the Americans with Disabilities Act (ADA), the Pregnant Workers Fairness Act (PWFA), and the Family and Medical Leave Act (FMLA). If an employer provides paid sick leave, such paid leave can be regulated per the employer’s sick leave policy. For information on how many employees an employer needs to have to be covered by certain laws, please visit the following link: https://efte.twc.texas.gov/thresholds_for_coverage.html.

An issue associated with sick leave is medical notes. An employer can require an employee to provide documentation associated with an absence if the absence has to do with something that is normally documentable. For a doctor’s visit, documentation could consist of some sort of doctor’s note or receipt from the medical facility. However, remember for purposes of the ADA such documentation should be kept in a separate, confidential medical file for the employee, not in the regular personnel file. For more information on documentation of medical notes, please visit the following link:https://efte.twc.texas.gov/attendance_and_leave_policies.html.

Bereavement Leave

Bereavement or funeral leave is not mandatory for employers to provide. Some employers have this type of leave as its own category of leave and others will group it together with vacation or sick leave. Employers can establish their own rules for granting bereavement or funeral leave.

Important Notes About Leave Time

Employers have a lot of flexibility on the rules they attach to their leave policies. However, that flexibility is not unlimited. For example, an employer cannot establish rules on their leave policies due to an illegal reason or that break a contract.

Another important note is that employers should take special care in the writing of their paid leave policies since the Texas Payday Law will enforce leave pay based on the employer’s written policy.   

What Happens to Paid Time Off (PTO) Balances Upon Separation from the Employer?

An employer can set rules on what occurs to leftover PTO when an employee becomes separated from the employer. In summary, what happens to PTO balances upon an employee’s separation depends on the employer’s written policy or agreement on accrued leave. Please visit the following links for more information on accrued leave payouts: https://efte.twc.texas.gov/accrued_leave_payouts.html and https://efte.twc.texas.gov/vacation_and_sick_leave.html#accruedleave.

Conclusion

Vacation and leave time are not unusual benefits for an employer to provide. By being familiar with the concepts surrounding leave time, the employer will be in a better position to offer this benefit to employees.

For more information on vacation and leave policies, please visit the following links in our online Texas Guidebook for Employers:

https://efte.twc.texas.gov/vacation_and_sick_leave.html

https://efte.twc.texas.gov/vacation_sick_and_parental_leave_policies.html