Vacation and holidays in the US: what employers should check

A German employer with an employee in the United States should not expect the German package of 24 Werktage statutory leave, paid public holidays and six weeks of continued sick pay to exist there. According to the US Department of Labor (DOL), the Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or holidays, and calls these benefits matters of agreement between employer and employee. State law fills part of the gap, for example paid sick leave in California and New York, and the Family and Medical Leave Act (FMLA) adds unpaid, job-protected leave. What the employer must set itself is therefore larger than in Germany.

Quick answer

Is there statutory vacation in the US?

No federal law requires it. The DOL vacation-leave page says the FLSA does not require payment for time not worked, such as vacations, and that these benefits are matters of agreement between an employer and an employee. The DOL FLSA FAQ repeats the point for sick leave and holidays.

That statement is about the FLSA. It does not say that no state could regulate leave, and the DOL page does not mention state law. In practice, the employment contract and the employer’s policy are the main source of a vacation entitlement. German law gives every employee a statutory entitlement under the Bundesurlaubsgesetz (BUrlG) whatever the contract says; the FLSA has no counterpart.

We found no official source for how many vacation days US employers typically grant, so this guide gives no figure. Decide the number yourself, and do not assume the German 24 Werktage (20 working days in a five-day week, according to the BMAS) will be read into a US contract.

Which public holidays apply?

None applies to private employers by federal law on the pages we checked. The DOL holiday-pay page says the FLSA does not require payment for time not worked, such as vacations or holidays, and the FLSA FAQ adds “or holidays (Federal or otherwise)”.

The list people usually cite is the federal one. The Office of Personnel Management (OPM) states that 5 U.S.C. 6103 establishes the listed public holidays for Federal employees, and subsection (b) scopes them to statutes on pay and leave of employees. The 2026 list has eleven days: New Year’s Day, Birthday of Martin Luther King, Jr., Washington’s Birthday, Memorial Day, Juneteenth National Independence Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving Day and Christmas Day. Neither page says private employers must give these days off or pay for them. We did not check state holiday rules, so confirm them for your state.

For comparison, the German picture is also layered: according to Destatis the number of public holidays differs from Land to Land, and Art. 1 of the Bavarian Feiertagsgesetz, for example, lists days such as Heilige Drei Könige, Fronleichnam and Allerheiligen. In Germany, section 2 of the Entgeltfortzahlungsgesetz (EntgFG) obliges the employer to pay for working time lost because of a statutory holiday. No comparable federal rule appears on the US pages we checked.

What do states regulate on paid sick leave?

Sick pay is where state law matters most. The federal FLSA baseline does not create a general paid-sick-leave entitlement for private-sector employees, but state and local rules may do so. Check the current rule where the employee works rather than relying on an aggregate state count.

California. Subject to statutory exemptions, an employee who works in California for the same employer for 30 or more days within a year is generally covered by paid-sick-leave rules. Leave accrues at not less than one hour per 30 hours worked under the standard method. The California Department of Industrial Relations (DIR) states that an employer may generally limit annual use to five days or 40 hours, whichever is more.

New York. According to the State of New York, employers with 100 or more employees must provide up to 56 hours of paid sick leave per calendar year, and employers with 5 to 99 employees up to 40 hours. Leave accrues at not less than one hour for every thirty hours worked. Smaller employers have a separate tier that depends in part on net income, so check the current official table rather than extrapolating these examples.

The two examples already differ in trigger, hours and employer-size rules. Do not transfer either to a third state. Compare this with Germany, where section 3 of the EntgFG provides continued pay of up to six weeks after four weeks of uninterrupted employment.

What does the FMLA provide?

The FMLA is a federal job-protected-leave law, and the statutory entitlement does not itself require wage replacement. An eligible employee may elect, or an employer may require, accrued paid leave to run concurrently under the statutory rules. In summary, the Act covers private employers with 50 or more employees in 20 or more workweeks in the current or prior calendar year. Eligible employees need 12 months of service, at least 1,250 hours worked in the prior 12 months and a worksite with 50 or more employees within 75 miles. The ordinary entitlement discussed here is up to 12 workweeks in a 12-month period.

Check coverage against your actual US headcount and worksite; a small US team may fall outside it. Some states run their own paid programmes. California’s Employment Development Department says Paid Family Leave offers benefit payments for up to 8 weeks in a 12-month period but does not itself provide job protection. New York Paid Family Leave describes up to 12 weeks of job-protected time off at 67 percent of the average weekly wage, funded by employees through payroll deductions. Eligibility conditions require a separate check with the state agency.

Is unused vacation paid out?

Only where the state or the employer’s promise says so. The DOL page is silent on payout, so the answer comes from state law and from your own policy.

California is a strict example, not a rule for all states. Under Labor Code section 227.3, where a contract or employer policy provides for paid vacations and an employee is terminated without having taken vested vacation, all vested vacation is paid as wages at the final rate. A contract or policy may not provide for forfeiture of vested vacation on termination, unless a collective bargaining agreement provides otherwise. The section does not itself create a right to vacation; it applies once vacation is promised.

Other states were not checked. In Germany, section 7 (4) BUrlG addresses leave that can no longer be granted because employment ends, and provides for payment in money. Do not assume the US treatment follows that logic, and do not copy a German forfeiture clause without a state-law review. For final pay in a termination, see terminating employees in the US.

How do you set vacation in the offer and the handbook?

Because the law leaves so much to agreement, write the decisions down. The EEOC notes that employers may decide to develop written policies, which can help employees understand the rules and limit liability if a complaint arises.

A workable list for the offer letter, contract or handbook:

• the number of vacation days, when they accrue and whether unused days carry over;
• what happens to unused vacation at exit, checked against the state’s payout rule;
• your holiday calendar, and whether holidays are paid;
• sick days and sick pay, at least to the level the state requires, and how the employee reports an absence;
• the FMLA or state family leave position if you may be covered; and
• the state whose law you have reviewed, with the date.

How do Germany and the US compare?

What does this mean for your hiring model?

The legal employer normally administers the leave package, but the applicable duties depend on the worker’s location, governing law and the employer’s policy. For the general comparison of employee, contractor and EOR, see hiring employees abroad: employee, contractor or EOR. For the whole US picture, start with the US hub and the guide to hiring in the United States from Germany. The wider comparison with German law is in US employment law for German companies, and the choice between a payroll employee and a contractor is explained in W-2 vs 1099.

If you employ the person yourself, through a US entity or directly, you set and administer vacation, holidays, sick leave and any FMLA obligations. A genuinely independent contractor is not covered as an employee by these employee-leave rules, but classification, contract terms and other applicable laws still require separate review.

When may an EOR help?

An EOR becomes the legal employer on its own payroll while you direct the daily work. That fits when employment is the right classification and you do not want to set up US payroll and benefits yourself. The leave and holiday terms still need to be agreed: ask who provides vacation, holidays, sick pay and any state-required leave, and which state’s rules the provider applied. See what an Employer of Record is.

In Deel’s dated EOR workflow, Deel is selected as legal EOR. The flow asks for country, location, visa needs, title, seniority, job scope, compensation and work arrangement, and it includes role and location restrictions before quote and agreement review. Obtain written confirmation for the exact US state, locality, role and employing entity.

If the model fits after comparison, ask Deel how an EOR handles leave for a US hire (opens in a new tab). Compare the answer with your own payroll and a US entity.

When may an EOR not fit?

An EOR may not fit when the person is a genuine independent contractor, when you already have a US subsidiary with payroll and benefits administration, or when the provider does not accept the role or state. Ask US employment, registration and tax advisers whether your facts instead call for a checked contractor arrangement, your own US entity or direct foreign-employer payroll. Using an EOR does not by itself displace applicable state or local leave rules, so confirm responsibility in writing.

Further reading

• United States: overview for German employers
• Hiring in the United States from Germany
• US employment law for German companies
• Terminating employees in the US
• US payroll for German companies
• Posting employees to the US: D-USA 101

Key terms

Employee

A worker engaged under a local employment contract, with the employer responsible for payroll, social security contributions and compliance with local labour law.

Contractor

A self-employed individual or business engaged for specific services under a commercial contract, without the employment protections or payroll obligations that apply to employees.

Employer of Record (EOR)

A third-party provider that legally employs a worker on behalf of a client company in a country where the client has no local entity, handling local payroll, contracts and compliance.

Permanent establishment

A tax concept describing a fixed place of business or sufficient business activity in a country that can trigger local corporate tax obligations for a foreign company.

Misclassification

Treating a worker as a contractor when, based on the actual working relationship, local law would classify them as an employee, which can create back taxes, penalties and employment claims.

Final checklist

• Identify the US state where the person works and read its rules on sick leave, holidays and vacation payout.
• Do not assume federal law grants vacation, holidays or paid sick leave; agree them in the offer and handbook.
• Write down vacation days, accrual, carry-over and what happens at exit.
• Define your holiday calendar and say whether holidays are paid.
• Check whether the FMLA or a state paid family leave programme covers the person.
• Compare your own payroll, a US entity, a genuine contractor and an EOR on the same facts, including who provides leave and sick pay.
• If an EOR remains appropriate, ask Deel about EOR options for a US hire (opens in a new tab) and compare the written answer with an alternative.