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Vacation leave is not required under Texas law - sick and/or parental leave is also not required, unless it would be a reasonable accommodation under disability- or pregnancy-related laws.
If granted, such leave can be paid or unpaid.
The employer can impose a cap on such leave and can put substantial eligibility strings on vacation, sick, or parental leave.
Paid vacation or sick leave is usually accrued at a set amount per month or year - parental leave is usually just a set amount per parental event (birth or adoption of a child, or placement of a foster child in the home).
It is extremely important to set the policy down clearly in writing, since the Texas Payday Law will enforce leave pay according to the terms of the written policy.
Things to cover: amount accrued each month/year; whether leave can be carried over from year to year, and if so, how much; what approval is needed to take leave; how much advance notice is needed to take leave; return to work status reports; what happens when paid leave runs out, but the employee is still on leave; whether paid leave advances will be granted, and if so, under what circumstances and with what repayment obligations; what happens to accrued leave balances when an employee leaves the company.
A way to keep the accrued balance from exceeding "x" amount of hours would be to draft the policy in such a way that it would be clear that once an employee reaches an accrued total of "x" hours, no further accruals will occur, and that the maximum amount of available sick leave at any given time will be "x" hours.
These kinds of leave are sometimes lumped together into one category called "personal time off" (PTO).
Do not count paid leave hours toward "hours worked" for overtime or FMLA eligibility purposes.
Just like other forms of paid leave, funeral or bereavement leave is not mandatory - some companies offer this as a separate category of leave, others include it within vacation or sick leave, or else include it as a qualifying reason for personal time off - this kind of leave is usually limited to three days per year or so, if offered - employers are allowed to ask employees to document the need for such leave, but it is a good idea to try to be as sensitive and accommodating as circumstances will allow.
See also: Vacation and sick leave policy checklist and sample policy
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