Paid Time Off (PTO) banks are an alternative to traditional paid leave plans that consolidate multiple types of leave (paid vacation, sick, and personal days) into a single plan. An employer does not designate leave for any particular reason, but instead simply gives employees one “bucket” of leave.

Nearly one in five employees in the United States receive leave in the form of a PTO bank, but the contours of such policies are often little understood—especially outside of the human resources community. While private consulting firms have published studies on the use of such plans in the private sector for years, the Bureau of Labor Statistics (BLS) just began releasing some information about consolidated leave plans (i.e., PTO banks) in 2010.

This report explores what is known, and what needs more study, about PTO banks. Other issues that may be addressed in later publications are union presence and PTO banks, the pros and cons for both employers and employees of offering PTO banks, the legal effects of state laws requiring payout of vacation time, how PTO banks work with no-fault absence policies, and the potential impacts of PTO banks on policy proposals.