Working Hours, PTO, and Vacation Policies Template

Working Hours, PTO, And Vacation Policy Template

This template provides a basic structure for your working hours, PTO, and vacation policy. And works as a starting point for building your company’s policy. We highly suggest adding, changing, or rearranging content to make it your own!

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Our working hours, PTO, and vacation policy outlines what your typical work hours look like. And they’ll go over everything you need to know about your paid time off, vacation days, and a few other types of time off.

Next : Scope >


This policy applies to [all full-time and part-time employees] of the company as well as any parties that represent the company or undertake tasks on its behalf.

Next : Exempt & non-exempt >

Exempt & non-exempt

Our employee classification policy outlines the different categories of employment in our company. It states the different types and statuses that an employee may acquire once they are hired by the company. This is rendered important for the administration of benefits and the application of policies as well as disciplinary procedures.

Employee classification is established as part of the Fair Labor Standards Act (FLSA). The FLSA policy determines which employees (exempt vs. non-exempt) are subject to minimum wage and overtime laws.

The company will observe any legal guidelines that apply to the classification of employees. Its own categories will be formulated in a manner that does not contradict any rule mandated by law and the benefits will be administered accordingly.

Next : Are you exempt or non-exempt? >

Are you exempt or non-exempt?

This criterion defines whether employees are categorized as exempt employees or non-exempt employees. Non-exempt employees have benefit eligibility that exempt employees do not. Benefits are not only those referred to by legislation (e.g. overtime policy) but they may also stem from the company’s own policies (e.g. employees who can not work from home as a result of their job responsibilities).

It is important that all employees know whether they are classified as exempt or non-exempt so they can be aware of their rights and avoid misunderstandings.

Amount of working hours. The amount of hours an employee is expected to work per day or week determines whether they are part-time or full-time employees. Full-time employees are typically employed on a 40-hour/week schedule according to legislation. The practice of flexible hours does not typically alter an employee’s status and if so, it must be clearly stated on a formal written agreement signed by both employee and employer. Part-time employees are those who work less than forty hours per week. Part-time employees are entitled to limited benefits in comparison to those who are employed full-time. Those benefits should be stated in their employment contract.

Duration of the job and position. The duration of the job or position defines whether one is employed under a permanent or temporary contract. There are also two additional subcategories referring to those who are working during a probationary period (who have not fully attained either of the previous statuses) and those who are indefinitely “on-call”.

Permanent employees are those whose contract does not have an expiration date and have completed their probationary period. They are considered the company’s “regular” employees and are categorized as regular full-time and regular part-time.

Temporary employees are those whose contract is valid for a definite amount of time and must be renewed in order for them to retain employee status. Those employees can be full-time or part-time. Interns, for example, are considered temporary part-time while interims are classified as temporary full-time.

Employees within a probationary period are usually excluded from certain terms of their employment agreement. Those terms, as well as the duration of the probationary period, will be explicitly stated in the employment contract.

An on-call employee may belong in two categories:

  • Employees who have been hired with full-time or part-time contracts and must remain accessible for certain hours exceeding their regular schedule. Those employees may be entitled to overtime pay or other benefits.
  • Employees who only work when called
Next : Working hours >

Working hours

We operate between [9 am to 7 pm on weekdays]. You may come to work at any time between [9 am and 11 am], depending on your team’s needs.

Some departments (such as [customer support and shipping]) may work after hours, too. If you work in these departments, you will follow a shift schedule as needed.

Our overtime policy explains how we’ll compensate employees for hours worked beyond their standard schedule. We want to:

  • Ensure employees will be consistently and correctly compensated for the time they put into their job duties
  • Minimize incidents of overtime abuse, loss of productivity, health and safety risks, and other issues

Our policy won’t contradict any legal guidelines. We’ll follow relevant legislation when assigning or compensating overtime hours.

Next : Overtime >


In our company overtime policy, “standard working hours” are an employee’s regularly scheduled working time. They’re usually specified in employment contracts and follow legal guidelines regarding minimum or maximum limits. “Overtime” that qualifies for compensation refers to any amount of time worked in addition to those hours.

Our policy’s general rules are:

  • We’ll classify our employees as exempt or non-exempt according to overtime pay laws
  • Non-exempt employees who work more than the standard working hours will be entitled to overtime pay
  • Employees are entitled to overtime pay regardless of where they work, as long as they perform work that our company accepts for its business purposes
Next : Excessive overtime >

Excessive overtime

Overtime may be necessary to handle emergencies, heavy workloads or other issues. But, frequent and excessive overtime isn’t good for employees’ health and performance. The law may or may not permit excessive overtime, but we want to avoid productivity and morale loss or work-related accidents due to fatigue.

For this reason, we will:

  • Record overtime hours accurately and consistently
  • Advise employees to work overtime only when they have to finish urgent work
  • Have all necessary provisions to allow employees to complete their work during standard working hours.
  • Take measures to gradually reduce overtime when we observe a decline in work quality or other issues due to excessive working hours
  • Set a daily and weekly cap for overtime at [2 hours per day or 8 hours per week]. Employees who work more than that will be compensated according to legal requirements. But, we advise employees to respect this limit

We will not:

  • Ask employees to work more than the maximum amount of hours per day or week permitted by law
  • Discriminate when choosing who has to work overtime and how they’ll be compensated for it
Next : Shift-based system >

Shift-based system

When employees are working on a shift-based system, we will not:

  • Ask employees working on night shifts to work for more than two hours overtime (unless in cases of emergency)
  • Allow employees who work 12-hour schedules to work more than two additional hours overtime
  • Encourage more than four hours of overtime for employees who work 8 to 10 hours
  • Ask employees who work more than 8-hour schedules to do double shifts
Next : Who is exempt from overtime? >

Who is exempt from overtime?

The law may exempt some employees from overtime compensation. These employees will receive overtime at our company’s discretion. All company provisions about excessive overtime will apply to exempt employees too.

Next : Abuse of overtime >

Abuse of overtime

We want to avoid any incidents of abuse of the overtime system, either by our company or employees, that may result in legal confrontation. We expect:

  • Managers to avoid asking or encouraging their team members to work excessive overtime
  • Employees to avoid working unnecessary overtime aiming for the highest pay, as this may result in a trade-off with the quality of their work

We are bound to compensate overtime pay at correct pay rates in a timely manner. Employees and managers should follow our timekeeping systems so we can maintain accurate records.

Employees should read this policy and direct any questions to our Human resources (HR) department.

Next : Overtime recording procedure >

Overtime recording procedure

To comply with record-keeping and overtime compensation requirements, we need a smooth procedure. We should record overtime timely.

  1. Team members and their managers agree on the hours of overtime needed. Overtime should not exceed any legal limits and employees shouldn’t end up working excessive hours
  2. Managers should know whether their team members are non-exempt or exempt and ensure their team members are aware
  3. Team members and managers accurately record overtime
  4. [Finance/HR] calculates overtime pay according to legal pay rates
  5. Team members receive their overtime compensation in the next scheduled pay period
Next : Break & lunch periods >

Break & lunch periods

Our employee breaks policy describes how employees should take breaks during their workday. We want our employees to be able to rest, eat, smoke and relax for some time during their workday to foster a pleasant workplace.

Breaks may be mandated by local law or union agreements. We will comply with these guidelines at all times.

Our employees can take the following breaks at work:

  • Meal breaks. We provide all employees who work more than [six hours] on a given day with a [30-minute] meal break. They should take it within [two to five hours] from the beginning of their workday. If you work longer than [10 hours] in one day, you can take a second meal break. These breaks are generally unpaid for non-exempt employees unless local law states otherwise
  • Rest breaks. Our employees can take one paid [10-minute] rest break for every four hours worked. So, if you work ten hours you may normally take two rest breaks
  • Restroom breaks. Employees can take reasonable toilet breaks, whenever they need to, as part of their workday.
  • Breastfeeding breaks. Employees who want to pump/express milk can use our lactation rooms according to our breastfeeding policy. A general provision for these unpaid breaks is [15 minutes]
Next : How breaks affect working hours >

How breaks affect working hours

Meal and breastfeeding breaks won’t count against your standard working hours or overtime. If possible, schedule these breaks in advance so your team will know when you will be unavailable. For certain positions, we may schedule lunch breaks to avoid any negative impact on our operations. For example, if you work in customer support, we may schedule lunch time so someone will always be available to answer customer requests.

Rest and restroom breaks are included in your working hours and are paid as normal.

Next : Mandatory breaks >

Mandatory breaks

Breaks are meant to get you away from work and recharge mentally, physically, emotionally, and more. So, please take your breaks at your designated times.

To safeguard your health and productivity, your manager may ask you to take a break if you haven’t taken one for more than [5 hours].

Next : Working during breaks >

Working during breaks

We don’t expect you to work during your breaks. However, if you need to perform any kind of work (for example, answering calls on your phone), we will pay your normal compensation for that time. Also, you will be paid as normal when you are obliged to remain on company premises during your meal break for a work-related reason (such as, waiting for a delivery).

Next : Impromptu breaks >

Impromptu breaks

We want our employees to feel well and be productive while working. If you need an impromptu break, just ask your manager.

If you need a break lasting longer than [30 minutes], you will need to use sick or PTO time.

Next : Attendance policy >

Attendance policy

Our employee attendance policy outlines our expectations about our employees’ coming to work. Being punctual when coming to work helps maintain efficiency in our workplace. This company attendance policy applies to all nonexempt employees regardless of position or type of employment.

Most employees need to collaborate with their colleagues to do their job. To make this collaboration easier, we expect you to be punctual and follow the schedule you and your manager have agreed on. If you are absent or late on occasion, you should have a good reason.

Being consistently tardy or absent can cause problems to your colleagues who may have to shoulder your work. This behavior may bring about a “bad attendance” record and you may need to go through progressive discipline.

Next : What is absenteeism and tardiness? >

What is absenteeism and tardiness?

Absenteeism refers to frequent absence from an employee’s job responsibilities. This includes not coming to work frequently or taking excessive sick leave without being able to submit doctor’s notes.

Presenteeism refers to being present at work beyond your schedule even when we don’t require overtime. This can cause you to overwork and have an impact on your productivity and job satisfaction. We want to ensure that you keep your schedule both when coming to work and leaving.

Tardiness refers to coming in late, taking longer breaks than you’re entitled to and constantly leaving earlier from work without reason. We probably won’t mind if you’re a bit late one morning or leave a little earlier on a Friday. But we want to make sure you generally follow your schedule and you don’t cause disruption in our workplace.

You are responsible for monitoring your working hours through our [timekeeping system/ software]. Please be diligent in recording your hours, so you can receive your due payment.

Next : Unforeseen absences >

Unforeseen absences

If you can’t come to work, notify your manager as soon as possible. If your manager is in a different time zone, contact HR instead. Afterward, you should draw from your remaining PTO or sick leave to cover this absence. Please record this in our [HR software] as quickly as possible. Unexcused or unreported absence for more than 3 days will be considered job abandonment. If you need to leave work early one day, inform your manager.

We will understand if you have good reasons for being absent, even if you don’t report it. Those reasons usually involve serious accidents and family or acute medical emergencies. We may ask you to bring us doctor’s notes or other verification. In these cases, we will record your absence as “excused.”

The following list, although not exhaustive, includes reasons that we don’t consider excused absence:

  • Waking up late
  • Stopping on the way to work for personal reasons
  • Traffic or public transportation delays excluding situations that result in closing of roads
  • Bad weather, excluding extreme weather conditions like blizzards, hurricanes and floods
  • Holidays that haven’t been approved
Next : Good attendance >

Good attendance

Employees who have less than [3 incidents] of absenteeism or tardiness in a year will receive an additional paid day off for next year. You have a good attendance record when you:

  • Report consistently to work
  • Come to work at the scheduled shift start time
  • Leave work at the scheduled shift end time (except when paid overtime is required)
  • Remaining at work during working hours (excluding breaks)
  • Take breaks that don’t exceed an expected length
  • Notify your manager when you need to be absent or late
  • Be absent or late with good reasons only
Next : Disciplinary action for poor attendance >

Disciplinary action for poor attendance

If your manager suspects you abuse your sick leave, you may need to submit doctor’s notes to avoid our progressive discipline process. If you’re being tardy unintentionally, corrective counseling will be our first attempt at a solution. We may take disciplinary action that goes up to and including termination if:

  • Corrective counseling doesn’t work.
  • We find that you are willfully tardy.
  • Your tardiness or absenteeism impacts your work.

Unexcused and unreported absences don’t count as hours worked, so we won’t compensate them.

Next : Paid holidays >

Paid holidays

Our company observes the following holidays:

  • [New Year’s Day]
  • [Martin Luther King Day]
  • [President’s Day]
  • [Good Friday/Easter Monday]
  • [Memorial Day]
  • [Independence Day]
  • [Labor Day]
  • [Indegionous Peoples Day]
  • [Veterans Day]
  • [Thanksgiving Day]
  • [Christmas Day]
  • [Boxing Day]

If a holiday falls on a day when our company doesn’t operate (such as, on a Sunday), we will observe that holiday on the closest business day.

Our company offers a floating day, which you can take as a holiday any day you choose. If you want to observe a religious holiday that isn’t included in our list, we may allow you to take unpaid time off for that day. Or, you may use your PTO.

Next : Holiday pay >

Holiday pay

Exempt employees are entitled to their normal compensation without any deductions.

Permanent non-exempt employees receive holiday pay as a benefit after they have worked with us for more than [3 months].

These holidays are considered “off-days” for most employees. If you need a team member to work on a holiday, inform them at least [3 days] in advance.

If you are a non-exempt employee, you will receive your regular hourly rate with a premium for working on a holiday. If you are an exempt employee, we will grant you an additional day of PTO that you must take within [12 months] after that holiday.

We [will/will not] count hours you worked on a holiday to decide whether you are entitled to overtime pay.

Next : Paid time off (PTO) >

Paid time off (PTO)

Employees receive [15 days] of Paid Time Off (PTO) per year. Your PTO accrual begins the day you join our company and you receive [1.7 days per month]. You can take your PTO at any time after your first [week] with us and you [can] use time off you haven’t accrued yet. You will earn one additional day per year after your [first year] with our company, with a cap at [25 days overall].

If you want to use PTO, send a request [through our HRIS]. If your manager or HR approves, you are permitted to take your leave. You do not have to specify a reason for requesting PTO.

You [can/cannot] roll over any remaining PTO to the next year. We encourage you to use your time off throughout the year.

If you leave our company, we may compensate accrued PTO with your final paycheck according to local law. When the law doesn’t have provisions, we will compensate accrued leave to employees who were not terminated for cause.

Next : Sick leave >

Sick leave

We offer [one week] of [paid] sick leave. In states or countries where employees are entitled to a greater number of sick leave days by law, we will follow that law. You can take sick leave to recover from short-term illness, injuries, mental issues and other indisposition. If you have the flu or other contagious disease, please use your sick days.

If you become sick, inform your manager and send a sick leave request [through our HRIS]. You may take a partial day off or work from home, but we advise you to rest and recuperate for a day before returning to work.

Use your PTO or arrange for a flexible work schedule if you want to attend routine health care (such as a doctor’s or dentist’s appointments.)

Occasionally, we may ask you to submit a physician’s note or other medical certification or complete a sick leave form. We will do this for insurance purposes if you are absent for more than [3 days] of sick leave.

Next : Parental leave >

Parental leave

Our company offers [3 months] of paid maternity, paternity, and adoption leave. If local or national law stipulates longer leave, we will follow the law.

Next : Jury duty & voting >

Jury duty & voting

If you are called for jury duty and you are an exempt employee, you can take [one day] off without deduction from your salary. If local or national law stipulates more days of paid jury duty leave, we will follow the law. On election day, you can take [2 hours] off to vote. You can take [a paid half-day off] if you need to travel a short distance to vote. If your trip lasts more days, please use your PTO.

Hourly employees may take [one unpaid day] off for jury duty and voting. If local or national law obliges us to provide hourly employees with paid jury duty leave, we will follow the law.

To keep good records, we ask you to bring us [a copy of your summons for jury duty and a document that proves you served].

Next : Military leave >

Military leave

An employee is entitled to time off at full pay for certain types of active or inactive duty in the National Guard or as a Reserve of the Armed Forces. Any full-time or permanent part-time employee is entitled to military leave.

  1. A full-time employee working a 40-hour work week will accrue 120 hours (15 days at 8 hours) of military leave in a fiscal year, or the equivalent of three 40-hour workweeks. Military leave will be prorated for permanent part-time employees on the number of hours in the employee’s regularly scheduled pay period.
  2. Inactive Duty Training is authorized training performed by members of a Reserve or National Guard component not on Active Duty. It is performed in connection with the prescribed activities of the Reserve or National Guard. It consists of regularly scheduled unit training periods, additional training periods, and equivalent training.
  3. Eligible employees may use 15 calendar days per year for Active Duty, Active Duty Training, and Inactive Duty Training. An employee can carry over a maximum of 15 days into the next fiscal year.
  4. Up to 22 workdays of military leave may be granted per calendar year for emergency duty as ordered by the President or a State governor. This can be for law enforcement or the protection of life and property.
  5. Reserve and National Guard Technicians are entitled to 44 workdays of military leave for duties overseas under certain conditions.
  6. Military leave should be credited to a full-time employee on the basis of an 8-hour workday. The minimum charge to leave is one hour. An employee may be charged military leave only for the hours that the employee would otherwise have worked and received pay.
  7. Employees who request military leave for Inactive Duty Training (which generally is two, four, or six hours in length) will be charged only the amount of military leave necessary to cover the period of training and necessary travel.
  8. An employee’s pay remains the same for periods of military leave. The employee’s pay is reduced by the amount of military pay for the days of military leave. However, an employee may choose not to take military leave and instead take annual leave in order to retain both company pay and military pay.
  9. When the employee requests military leave, they must make an appropriate request and provide copies of their military orders.
Next : Questions? Comments? Concerns? >

Questions? Comments? Concerns?

Have a question about this policy? Reach out to [HR contact].

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