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Leave policy in the United States of America: Employer’s guide in 2026

Understand leave policy in the United States of America, including federal laws, FMLA rules, paid and unpaid leave types, employer practices, and compliance requirements for businesses.

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Leave policy in the United States of America: Employer’s guide in 2026
Leave policy in the United States of America: Employer’s guide in 2026

Payoneer Team

The leave policy in the United States (U.S.) varies depending on the states, with employees typically getting 12 public holidays, and there is no federal entitlement for annual or sick leave, as it depends on state laws (FMLA) and employer discretion. However, an EOR can help you navigate the local leave policy along with key employment aspects like employee onboarding, payroll, statutory benefits, and more.

An Employer of Record (EOR) is a company that officially employs your workers for you. It takes care of the legal paperwork, payroll, taxes, and benefits in a given country or state, so you can hire people there without opening your own local entity 

The employee leave laws in the United States of America take a unique approach. Unlike most unions, there is no federal law mandating paid vacation, paid sick days, or paid parental leave for private-sector workers. 

Instead, leave policy in the United States of America is shaped by a combination of state-level mandates under the Family and Medical Leave Act (FMLA) and individual employer policies. 

For businesses hiring across states, staying aligned with the varying leave entitlements in the United States of America is a key part of workforce compliance. 

In this guide, we shall explore the United States leave policy for private-sector employees in detail. 

We will also explain how Employer of Record (EOR) solutions like Payoneer Workforce Management can help businesses stay on top of these evolving obligations. 

Book a demo to understand how we can support you with employment in the US.

What is vacation or annual leave in the United States of America? 

There is no federal law in the United States that mandates employers to grant paid vacation or annual leave to employees. Although the Fair Labor Standards Act (FLSA) governs wages, hours, and overtime, it does not address paid time off in the United States of America. 

However, states like Illinois, for example, require employers to provide paid time off as per employer policy, which can be used for any reason, including vacation. 

That said, most employers offer benefits packages as part of annual leave in the United States of America. 

Further, the U.S. Bureau of Labor Statistics (BLS) suggests that private-sector employees have access to some form of paid leave, which may include vacation, sick leave, or personal days off. 

What are the public holidays in the United States of America?

There are 12 federal public holidays in the United States every year. Although these apply to federal employees and government offices, private employees are not required to provide holiday pay or time off for them. 

Most businesses in the United States voluntarily honor the major holidays like Christmas, Thanksgiving, and Independence Day as paid days off. 

The 12 federal public holidays are as follows: 

Event Date 
New Year’s Day1st January 
Birthday of Martin Luther King, Jr. 3rd Monday of January
Inauguration Day20th January, every 4 years following a presidential election
Washington’s Birthday (Also known as President’s Day)3rd Monday of February 
Memorial DayLast Monday in May
Juneteenth National Independence Day19th June 
Independence Day 4th July
Labor Day 1st Monday in September 
Columbus Day2nd Monday in October 
Veterans Day 11th November 
Thanksgiving Day4th Thursday in November 
Christmas Day 25th December 

Some additional states in the United States also have public holidays that are recognized and maintained locally. For instance, the state of Washington and the District of Columbia have events like Indigenous Peoples Day or Emancipation Day. 

You can refer to the official website for a complete list of federal and state leaves in the United States. 

How many days of sick leave are employees entitled to in the United States of America?

There is no federal entitlement to paid sick leave in the United States. Sick leave is primarily managed at the state and local level; the number of days varies by location. 

The U.S. Department of Labor confirms that while some federal and state laws require unpaid sick leave, paid sick leave in the United States of America is primarily governed at the state and local level.

However, companies that are subject to the Family and Medical Leave Act grant unpaid sick leave to employees. FMLA provides for up to 12 weeks of unpaid leave for certain medical conditions for either the employee or the employee’s immediate family member. 

Employees may be eligible to take FMLA leave if they satisfy the following conditions: 

  • If they have worked for their employer for a minimum of 12 months.
  • If they have worked for at least 1,250 hours over the previous 12 months.
  • If they work at a location where a minimum of 50 employees are employed within 75 miles. 

State-level highlights

In California, employees are entitled to 40 hours (or 5 days) of paid sick leave annually, with some cities requiring even more. 

New York’s requirements vary by employer size, with large employers providing up to 56 hours. 

For businesses operating in multiple states or countries, a streamlined solution is to partner with an EOR offered by a workforce management platform to engage talent and navigate each jurisdiction’s rules.

What is the maternity leave policy in the United States of America?

There is no federal law in the United States that guarantees paid maternity leave. Eligible employees are entitled to 12 weeks of unpaid leave under the Family and Medical Leave Act (FMLA). 

Apart from this, the actual benefits vary depending on the employee’s state, the company’s internal policy, and whether they meet the FMLA eligibility requirements with respect to company size and tenure. 

How much is paternity leave in the United States of America?

There is no separate federal paternity leave in the United States of America. However, the Family and Medical Leave Act (FMLA) applies equally regardless of gender. 

An eligible employee may take up to 12 weeks of unpaid, job-protected leave to bond with a newborn or newly placed child, whether through birth, adoption, or foster care.

This means both parents are individually entitled to 12 weeks of FMLA leave, provided they each meet the eligibility criteria. The leave must be taken within the threshold period of the child’s birth.

What are the other types of leaves in the United States of America?

Apart from leaves like paid vacation, sick leave, parental leave, and public holidays (both federal and state), employers in the United States may need to provide other leaves like bereavement leave, jury duty leave, military leave, voting leave, and domestic violence/safe leave. 

All these leaves are governed at the state level except the military leave, which is protected nationwide under the United States ERRA. 

Whether the leave is paid, its duration, and other aspects depend heavily on the state law and individual employer policy. 

  1. Bereavement leave: While there is no federal law, employers may offer compassionate leave as per the company policy.
  2. Jury duty leave: Federal law prohibits employers from firing or threatening employees who serve on federal juries. Many states extend similar protections. Whether jury duty leave is paid depends on state law and employer policy.
  3. Military leave: The Uniformed Services Employment and Reemployment Rights Act (USERRA) protects employees who serve in the military. It guarantees reemployment rights for up to five years of cumulative military service and prohibits discrimination based on military obligation.
  4. Voting leave: You may provide up to two hours of paid time-off for voting. This can vary based on the state policy. 
  5. Domestic violence/safe leave: Many state paid sick leave laws include provisions for safe leave, allowing employees to take time off to address situations involving domestic violence, sexual assault, or stalking.

 Let us look at an example to understand better: 

Maria is a software engineer at a tech company in California. She joined on 1 January 2026 and works full-time year-round.

For 2026, Maria’s employer’s policy grants her:

  • Vacation/PTO: 15 days (accrued at 1.25 days per month, per company policy; this is not federally mandated)
  • Sick Leave: 5 days (40 hours), the California state minimum
  • Public Holidays: 11 federal holidays observed per company policy, plus Inauguration Day if her location/role applies (not relevant in 2026, since it only recurs every 4 years following a presidential election)
  • State PFML: California’s Paid Family Leave program, available for qualifying events like bonding with a new child or caring for a seriously ill family member
  • FMLA: Up to 12 weeks of unpaid, job-protected leave, available only if a qualifying event occurs (not a standard annual entitlement)

Maria uses 10 vacation days during the year. The remaining 5 days carry forward into 2027, since her company’s policy (not any federal or California law) permits unused PTO to roll over up to a 10-day cap.

What would happen if the leave policy in the United States of America were not handled by an EOR?

When businesses hire without an Employer of Record, employers have to independently track and comply with the leave laws that apply across federal and state levels. This increases the risk of non-compliance, errors in payroll, and other kinds of disputes. 

An EOR helps to centralize this system by administering the leave entitlements correctly, thereby meeting the statutory obligations across jurisdictions and freeing the HR teams from complexities. 

Have a look at this table to understand the comparison better: 

Leave policy aspectHiring without an EORHiring with an EOR 
Calculation of leave entitlement High risk of errors due to varying state PTO, sick leave, and parental leave rulesAccurately calculated per applicable federal (FMLA, USERRA) and state-specific leave laws
Changes in state laws Employers must independently monitor changing state and local leave legislationEOR tracks and implements state/local legal changes as they take effect
Statutory compliance Employers must track FLSA, FMLA, USERRA, and varying state sick leave/PTO laws separatelyEOR helps navigate compliance with federal law and all applicable state-specific leave statutes
Payroll during leaveManual calculation of wages during leave periods, with high error riskSeamless payroll processing during all leave periods at the correct statutory rates
Leave carry-forward policyComplex to manage across states with differing carry-forward and payout-on-termination rulesManaged in line with each state’s specific carry-forward and final-payout requirements
Multi-state operationsSeparate compliance frameworks are required for each state of operationSingle-point compliance across the United States through one EOR partner

Are you ready to explore Payoneer Workforce Management in the United States of America?

Leave policy compliance across various U.S. states is time- and resource-intensive. Whether it is the rate of paid sick leave accrual or the parental leave policy, the details are minute and must be precise.

Payoneer Workforce Management can help you navigate local employment laws within a single platform for global onboarding, payroll, and more in 160+ countries. 

Learn more about how an Employer of Record solution can assist you with your global expansion strategy.

With the help of Payoneer Workforce Management, you can engage talent quickly and securely with localized contracts and payroll, without needing to have a local presence. 

Ready to simplify global workforce management? Book a demo today.

Frequently asked questions (FAQs)

There is no federal law requiring paid vacation time for private employers. Paid vacation time in the United States of America is primarily initiated by employers, although a few states, such as Maine, Nevada, and Illinois, require paid vacation time that can be used for any reason, including vacation.

The U.S. observes 12 federal public holidays each year, including New Year’s Day, Independence Day, and Christmas. These apply to federal employees and government offices. Private employers aren’t required to give holiday pay or time off, though most voluntarily honor major holidays like Thanksgiving and Christmas as paid days off. 

No, there’s no federal law mandating paid sick leave in the U.S. Sick leave is governed primarily at the state and local level, so entitlements vary by location. California guarantees 5 paid sick days annually, while New York’s requirements depend on employer size, offering up to 56 hours for larger companies. 

The FMLA provides eligible employees up to 12 weeks of unpaid, job-protected leave for childbirth and bonding with a newborn. There’s no federal guarantee of paid maternity leave. Actual benefits depend on the employee’s state, employer policy, and whether they meet FMLA eligibility requirements around company size and tenure.

There’s no separate federal paternity leave, but the FMLA applies equally regardless of gender. Eligible fathers can take up to 12 weeks of unpaid, job-protected leave to bond with a newborn or newly placed child. Both parents are individually entitled to this leave, provided they each meet eligibility requirements.

When a federal holiday falls on a Saturday, federal employees typically observe it on the preceding Friday. If it falls on a Sunday, the following Monday is observed instead. For example, in 2026, Independence Day falls on Saturday, July 4, so federal offices will close on Friday, July 3.

Yes, the Uniformed Services Employment and Reemployment Rights Act (USERRA) protects employees who serve in the military, guaranteeing reemployment rights for up to five cumulative years of service. It also prohibits employers from discriminating against employees based on their military service obligations.

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  • Expand internationally in 160+ countries
  • Run global payroll securely in a few clicks
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Leave policy in the United States of America: Employer’s guide in 2026
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