Employee PTO

Do I have to give employees vacation, holiday, or sick pay?

What does the law say about paying employees for holidays, sick time, vacations, and overtime?

The Federal Law does not require you to pay for an employee’s vacation, holiday, or sick pay. However, the state is different and some states have different rules than others. Be sure to check with your local labor council and any Human Resource Professionals who know the area to help with any uncertainties.
Over time is completely different story. The federal law requires you to identify all of your employees as either an exempt employee or a non-exempt employee.

Non-exempt employees are typically hourly employees in non-decision making roles. These employees, MUST be paid for overtime. For all hours worked over 40 hours in a one week period. The over-time rate is to be at 1.5x the base hourly rate of that employee.

What about my salaried (exempt) employees?

For exempt employees, generally those in managerial, professional, administrative employees that make at least $23,660 per year. These employees are not required to be paid over time, but depending on your state there are certain requirements. Exempt employees are required to paid sick days.

It is highly recommended that you document ALL policies regarding employee pay and consult a professional to review your policies.

01/20/2020
By: Gary Grottke, CPA, Quality Back Office