H.R. 4763 — PTO Act

This section defines terms for purposes of the Act, including (1) commerce, incorporating definitions from the Labor Management Relations Act of 1947 (29 U.S.C. 142); (2) covered employee, meaning employees not covered under other provisions (with employer references modified), Government Accountability Office employees, certain state employees under the Government Employee Rights Act of 1991, covered employees under the Congressional Accountability Act of 1995 (2 U.S.C. 1301, other than applicants for employment), and certain federal employees under 5 U.S.C. ch. 63 subch. V; (3) employer, meaning persons engaged in commerce including covered employers (those with 1 or more employees for 20+ workweeks), the Government Accountability Office, the Library of Congress, employing offices under the CAA, rail carriers, public agencies, and predecessors or successors; (4) employ, employee, person, and State, adopting definitions from the Fair Labor Standards Act of 1938 (29 U.S.C. 203); (5) paid annual leave, meaning paid vacation or personal leave excluding family/medical leave, sick leave, bereavement leave, adoption/foster leave, domestic violence leave, public health emergency leave, workers' compensation, holidays, jury/civic duty, and voting leave; (6) rail carrier, as defined in 49 U.S.C. 10102; and (7) Secretary, meaning the Secretary of Labor.

This section establishes a paid annual leave requirement under the Fair Labor Standards Act (FLSA) for all covered employers. Employers must provide employees at least 1 hour of paid annual leave for every 25 hours worked (up to 80 hours in any 12-month period, though employers may provide more), with accrual beginning at the start of employment; overtime-exempt employees are deemed to work 40 hours per workweek. Leave may be used for any reason as it accrues (subject to notice and scheduling procedures), in increments of 1 hour or the employer's smallest payroll increment, at the employee's regular rate (or, for tipped employees, the higher of the federal, state, or local minimum wage or other required wage or the regular rate); employers must maintain employment benefits during leave use and may loan leave in advance (with optional reimbursement upon separation at the regular rate). Scheduling requires employee notice (with Secretary-provided samples, up to 2 weeks' advance notice except for unforeseeable leave); employers may impose reasonable restrictions for bona fide business reasons if they offer alternative dates within 30 days and provide written denial notice within 5 business days (without preventing use of expiring leave), may not require disclosure of leave purpose or finding a replacement worker, and must allow carryover of up to 40 hours to the next 12-month period. The Secretary of Labor must issue compliance guidance within 180 days of enactment.

This section requires employers to notify employees of their paid annual leave policy—(1) in writing on or before the first day of employment; (2) in any employee handbook; and (3) by posting a notice in a conspicuous physical or virtual place where notices are customarily posted. Such notice must include the policy details (including if it exceeds the Act's requirements), information on filing an action under section 6, any employer notice requirements under section 3(c)(2), and employee protections and contact information for the Secretary (or other authority) if rights are violated. The section also requires employers to establish a system (e.g., online portal, written request, or pay stubs) to inform employees of their accrued paid annual leave.

This section prohibits employers from (1) violating provisions of sections 3 or 4; (2) discharging or discriminating against (including retaliating against) any individual for exercising rights under the Act; (3) using paid annual leave under the Act as a negative factor in employment actions such as hiring, promotion, reducing hours or shifts, or discipline; or (4) counting such leave use under no-fault attendance or absence-control policies. It further prohibits any person from discharging or discriminating against (including retaliating against) an individual for filing an action or participating in any proceeding, inquiry, or testimony under the Act and establishes a motivating factor standard for proving violations (i.e., the prohibited action need not be the sole motivation).

This section establishes Department of Labor (DOL) investigative authority—modeled on sections 9, 11(a), and 11(c) of the Fair Labor Standards Act of 1938 (29 U.S.C. 209 et seq.)—to ensure employer compliance with the Act, including subpoena power and employer recordkeeping requirements, while limiting required record submissions to once per 12-month period absent reasonable cause. This section authorizes (1) private rights of action in federal or state court by affected employees or representatives for violations of section 5, with employer liability for damages equal to lost wages, salary, benefits, or compensation (or actual monetary losses up to 80 hours of wages if none denied), interest, liquidated damages, equitable relief (e.g., reinstatement), and plaintiff attorney’s fees and costs; and a two-year statute of limitations (three years for willful violations); and (2) DOL administrative investigations of complaints (modeled on FLSA sections 6 and 7), civil actions for damages and injunctions, and payment of recovered sums directly to affected employees (with unclaimed amounts after three years deposited in the Treasury). This section vests enforcement authority for the Government Accountability Office and Library of Congress, respectively, in the Comptroller General and Librarian of Congress and applies the powers, remedies, and procedures of the Congressional Accountability Act of 1995 (2 U.S.C. 1301 et seq.) to its covered employees.

This section provides that the Act does not supersede any state or local law providing greater paid annual leave or other leave rights than the Act (deeming any such law that does not distinguish between paid annual leave and sick leave as providing lesser rights). The section further provides that the Act does not diminish employer obligations under any contract, collective bargaining agreement, or employment benefit program or plan that is more protective than the Act, and that the Act's rights supersede any less protective agreement.

This section directs the Secretary to carry out, not later than one year after the date of enactment, a public awareness campaign informing the public about the paid annual leave established under the Act, including employee rights under the Act and resources available for violations. The section authorizes appropriations of such sums as are necessary to carry out the campaign.

This section sets the effective date of the Act as 180 days after enactment. For collective bargaining agreements in effect on that date, the Act takes effect on the earlier of (1) the agreement's termination date, (2) the date of any amendment made on or after the effective date, or (3) 18 months after the effective date.