H.R. 4763

119th CONGRESS 1st Session

To require employers to provide paid annual leave to employees, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES · July 25, 2025 · Sponsor: Mr. Magaziner

H.R. 4763

SEC. 1. Short title

This Act may be cited as the or the .

SEC. 2. Definitions

In this Act:
- The terms and mean any activity, business, or industry in commerce or in which a labor dispute would hinder or obstruct commerce or the free flow of commerce, and include and any , as defined in paragraphs (1) and (3) of section 501 of the Labor Management Relations Act, 1947 ( and (3)). industry affecting commerce commerce,industry or activity affecting commerce 29 U.S.C. 142(1)
- The term covered employee means an individual who is—
- The terms , , , and have the meanings given the terms in section 3 of the Fair Labor Standards Act of 1938 (). employ,employee,person,State 29 U.S.C. 203
- The term — paid annual leave
- The term rail carrier has the meaning given such term in section 10102 of title 49, United States Code.
- Unless otherwise specified, the term Secretary means the Secretary of Labor.

SEC. 3. Earned annual leave

(a) Earning of paid annual leave
- (1) Earning of annual leave
  - An employer shall provide each employee employed by the employer not less than 1 hour of paid annual leave for every 25 hours worked.
- (2) Limitation
  - (A) In general
    - For purposes of complying with paragraph (1), an employer may not be required to provide more than 80 hours of paid annual leave to an employee during any 12-month period.
  - (B) Rule of construction
    - Nothing in this section may be construed to preclude an employer from providing more than 80 hours of paid annual leave.
- (3) Commencement of earning paid annual leave
  - An employee shall begin to earn paid annual leave at the commencement of employment of such employee.
- (4) Overtime exempt employee
  - For purposes of this section, where an employer is not required by the Fair Labor Standards Act of 1938 to maintain and preserve records of hours worked because an employee is exempt from minimum wage or overtime requirements under such Act (), the employee shall be deemed to work 40 hours in each workweek. 29 U.S.C. 213(a)
(b) Use of paid annual leave
- (1) In general
  - Paid annual leave may be used by an employee for any reason.
- (2) Timing
  - Subject to paragraphs (2) and (3) of subsection (c), an employee may use paid annual leave earned by the employee as it is accrued.
- (3) Rate of compensation
  - (A) In general
    - An employee using paid annual leave shall be compensated, for the period that the employee is using such leave, at the regular rate at which the employee would have been paid for such period if the employee were not using paid annual leave.
  - (B) Tipped employee
    - For the purposes of subparagraph (A), with respect to a tipped employee (as defined in section 3(t) of the Fair Labor Standards Act of 1938 ()), such an employee shall be compensated, for the period that such employee is using paid annual leave, at a rate equivalent to the higher of— 29 U.S.C. 203(t)
      - (i) the Federal minimum wage;
      - (ii) the applicable State minimum wage;
      - (iii) the applicable local or municipal minimum wage;
      - (iv) any other wage required by law; or
      - (v) the regular rate at which the employee is employed.
- (4) Loaning of annual leave
  - (A) Loaned leave
    - An employer may loan paid annual leave to an employee for use by such employee in advance of the employee earning such annual leave.
  - (B) Reimbursement for loaned leave
    - An employer may require an employee of such employer to reimburse the employer for any annual leave loaned under subparagraph (A) that such employee has not earned at the time of separation. Such reimbursement shall be at the rate described in paragraph (3).
- (5) Increments of use of paid annual leave
  - An employer shall allow employees to use paid annual leave in increments of the smaller of—
    - hourly increments; or
    - the smallest increment of time that the employer’s payroll system uses to account for absences or use of other time.
- (6) Benefits retained during leave
  - An employer shall maintain any employment benefits (as defined in section 101(5) of the Family and Medical Leave Act of 1993) provided to an employee during any period in which the employee takes paid annual leave, and such benefits shall be provided in the same manner as if the employee had continued in employment continuously for the duration of such leave.
(c) Procedures for use of paid annual leave
- (1) In general
  - Subject to paragraphs (2) and (3), an employee may use paid annual leave upon the verbal or written request of the employee.
- (2) Employee notification
  - (A) Employee notification
    - An employee shall provide notice to the employer to use paid annual leave.
  - (B) Notice described
    - The Secretary shall create sample notices for the purpose described in subparagraph (A).
  - (C) Timing of notice
    - An employer may not require an employee to provide notice in excess of 2 weeks in advance of the use of such leave.
  - (D) Unforeseeable use of leave
    - In the case of an unforeseeable use of leave, an employee shall not be required to provide the notice required under subparagraph (A).
- (3) Reasonable restrictions
  - (A) In general
    - An employer may place limited, reasonable restrictions for the scheduling of paid annual leave for a bona fide business reason and may reject a scheduling request for such leave for a bona fide business reason, so long as the employer—
      - (i) provides other reasonable alternative times, as described in subparagraph (B), for the employee to schedule such leave; and
      - (ii) and complies with the notice requirement described in subparagraph (C).
  - (B) Reasonable alternatives
    - A reasonable alternative time described in this subparagraph is a date other than the date the employee requested to use paid annual leave that is within 30 days of such date.
  - (C) Denial notice
    - In the case that an employer denies a request of an employee to use paid annual leave, the employer shall, not later than 5 business days after the day the employee made such request, provide to the employee a written notice—
      - (i) detailing the bona fide business reason for such denial; and
      - (ii) that provides the reasonable alternative time described in subparagraph (B).
  - (D) Can not prevent use of expiring leave
    - Such reasonable alternative time may not be offered to prevent the use of paid annual leave that is set to expire.
- (4) Purpose of use of paid annual leave
  - An employer may not require an employee to disclose the purpose or reason for which the employee is using paid annual leave.
- (5) Carryover
  - An employer shall permit an employee of such employer to carry over up to 40 hours of any accrued and unused paid annual leave to the following 12-month period.
- (6) Prohibition on finding cover
  - An employer may not require, as a condition of taking paid annual leave, that an employee search for or find a replacement employee to cover the hours during which the employee is using such annual leave.
- (7) Guidance
  - Not later than 180 after the date of enactment of this Act, the Secretary shall provide guidance to employers on compliance with paragraph (3), including defining the terms limited reasonable restriction, a bona fide business reason, and a reasonable alternative time.
(d) Procedures regarding leave for employee separation
- (1) Compensation
  - In the case that an employee separates from an employer and such employee has unused paid annual leave, the employer shall provide financial compensation at a rate that is the higher of—
    - the average regular rate received by such employee during the last 3 years of the employee’s employment; or
    - the final regular rate received by the employee.
- (2) Reinstatement
  - If an employee separates from employment with an employer and is rehired within 12 months after that separation by the same employer—
    - in the case that the employee had paid annual leave in excess of 80 hours that was not compensated under paragraph (1), the employer shall reinstate such leave for the employee; and
    - the employee shall be entitled to use such leave and earn additional paid annual leave at the recommencement of employment with the employer.

SEC. 4. Employer notice and system requirements

(a) Notice requirement
- An employer shall notify each employee about the paid annual leave policy of such employer, which shall include the information described in subsection (b), by—
  - providing such information, in writing, to each employee on or before the first day of employment of such employee;
  - including such information in any employee handbook; and
  - posting a notice containing such information in a physical conspicuous place on the premises of the employer or a virtual conspicuous place, where notices to employees are customarily posted.
(b) Contents
- The information provided pursuant to subsection (a) shall include—
  - any paid annual leave policy of such employer, including any paid annual leave policy that provides paid annual leave in excess of the requirements of this Act;
  - information pertaining to the filing of an action under section 6;
  - details of any notice requirement the employer may require, as described in section 3(c)(2); and
  - information regarding—
    - the protections that an employee has in exercising rights under this Act; and
    - how the employee can contact the Secretary (or other appropriate authority as described in section 6) if any such rights are violated.
(c) System requirement
- An employer shall establish a system, such as through an online portal, written request, or through pay stubs, to inform each employee of the employer how much paid annual leave each employee has earned.

SEC. 5. Prohibited acts

(a) Interference with rights
- It shall be unlawful for any employer to—
  - violate any provision of section 3 or 4;
  - discharge or discriminate against (including to retaliate against) any individual, including a job applicant, for exercising, or attempting to exercise, any right provided under this Act;
  - use the taking of paid annual leave provided under this Act as a negative factor in an employment action, such as hiring, promotion, reducing hours or numbers of shifts, or a disciplinary action; or
  - count the use of such leave under a no-fault attendance policy or any other absence-control policy.
(b) Interference with proceedings or inquiries
- It shall be unlawful for any person to discharge or in any other manner discriminate against (including retaliating against) any individual, including a job applicant, because such individual—
  - has filed an action under section 6, or has instituted or caused to be instituted any proceeding, under this Act;
  - has given, or intends to give, any information in connection with any inquiry or proceeding relating to any right provided under this Act; or
  - has testified, or intends to testify, in any inquiry or proceeding relating to any right provided under this Act.
(c) Impermissible consideration
- A violation of subsection (a) or (b) shall be established when a complaining party demonstrates that any action described in paragraphs (1), (2), or (3) of subsections (a) or (b) was a motivating factor in any such action taken against the complaining party, even though other factors also motivated the action.

SEC. 6. Enforcement and investigative authority

(a) In general
- (1) Definition
  - In this subsection—
    - the term employee means a covered employee described in subparagraph (A), (B), or (C) of section 2(2); and
    - the term employer means an employer described in subclauses (I) or (II) of section 2(3)(A)(i).
- (2) Investigative authority
  - (A) In general
    - To ensure compliance with this Act, or any regulation or order issued under this Act, the Secretary shall have, subject to subparagraph (C), the investigative authority provided under section 11(a) of the Fair Labor Standards Act of 1938 (), with respect to employers, employees, and other individuals affected by an employer. 29 U.S.C. 211(a)
  - (B) Obligation to keep and preserve records
    - An employer shall make, keep, and preserve records pertaining to compliance with this Act in accordance with section 11(c) of the Fair Labor Standards Act of 1938 () and in accordance with regulations prescribed by the Secretary. 29 U.S.C. 211(c)
  - (C) Required submissions generally limited to an annual basis
    - The Secretary may not require an employer to submit to the Secretary any books or records more than once during any 12-month period, unless the Secretary has reasonable cause to believe there may exist a violation of this act or any regulation or order issued pursuant to this Act, or is investigating a charge pursuant to paragraph (4).
  - (D) Subpoena authority
    - For the purposes of any investigation provided for in this paragraph, the Secretary shall have the subpoena authority provided for under section 9 of the Fair Labor Standards Act of 1938 (). 29 U.S.C. 209
- (3) Private right of action
  - (A) In general
    - An action to recover damages or equitable relief prescribed in subparagraph (B) may be maintained against any employer in any Federal or State court of competent jurisdiction by an employee or individual or a representative for and on behalf of—
      - (i) the employee or individual; or
      - (ii) the employee or individual and others similarly situated.
  - (B) Liability
    - Any employer who violates section 5 shall be liable to any employee or individual affected—
      - (i) for damages equal to—
      - the amount of—
      - any wages, salary, employment benefits, or other compensation denied or lost by reason of the violation; or
      - in a case in which wages, salary, employment benefits, or other compensation have not been denied or lost, any actual monetary losses sustained as a direct result of the violation up to a sum equal to 80 hours of wages or salary for the employee or individual;
      - the interest on the amount described in subclause (I) calculated at the prevailing rate; and
      - an additional amount as liquidated damages; and
      - (ii) for such equitable relief as may be appropriate, including employment, reinstatement, and promotion.
  - (C) Fees and costs
    - The court in an action under this subsection shall, in addition to any judgment awarded to the plaintiff, allow a reasonable attorney’s fee, reasonable expert witness fees, and other costs to be paid by the defendant.
  - (D) Limitations
    - (i) Except as provided in subparagraph (B), an action may be brought under paragraph (2) or (3) not more than 2 years after the date of the last event constituting the alleged violation for which the action is brought.
    - (ii) In the case of an action brought for a willful violation of section 5 (including a willful violation relating to rights provided under section 3), such action may be brought not more than 3 years after the last event constituting the alleged violation for which such action is brought.
    - (iii) In determining when an action is commenced under paragraph (2) or (3) for the purposes of this subsection, the action shall be considered to be commenced on the date when the complaint is filed.
- (4) Actions by the Secretary
  - (A) Administrative actions
    - The Secretary shall receive, investigate, and attempt to resolve complaints of violations of section 5 in the same manner that the Secretary receives, investigates, and attempts to resolve complaints of violations of sections 6 and 7 of the Fair Labor Standards Act of 1938 (29 U.S.C. 206 and 207).
  - (B) Civil action
    - The Secretary may bring an action in any court of competent jurisdiction to recover the damages described in subsection (a)(3)(B).
  - (C) Sums recovered
    - Any sums recovered by the Secretary pursuant to subparagraph (B) shall be held in a special deposit account and shall be paid, on order of the Secretary, directly to each employee or individual affected. Any sums not paid to an employee or individual affected because of the inability to do so within a period of 3 years shall be deposited into the Treasury of the United States as miscellaneous receipts.
  - (D) Action for injunction by Secretary
    - The district courts of the United States shall have jurisdiction, for cause shown, in an action brought by the Secretary—
      - (i) to restrain violations of section 5 (including a violation relating to rights provided under section 3), including the restraint of any withholding of wages, salary, employment benefits, or other compensation, plus interest, found by the court to be due to employees or individuals eligible under this Act; or
      - (ii) to award such other equitable relief as may be appropriate, including employment, reinstatements, and promotion.
  - (E) Solicitor of Labor
    - The Solicitor of Labor may appear for an represent the Secretary on any litigation brought under this subsection.
(b) Government Accountability Office and Library of Congress
- Notwithstanding any other provision of this section, in the case of the Government Accountability Office and the Library of Congress, the authority of the Secretary under this subsection shall be exercised respectively by the Comptroller General of the United States and the Librarian of Congress.
(c) Employees covered by Congressional Accountability Act of 1995
- The powers, remedies, and procedures provided in the Congressional Accountability Act of 1995 () to the Board (as defined in section 101 of that Act ()), or any person, alleging a violation of section 202(a)(1) of that Act () shall be the powers, remedies, and procedures this Act provides to that Board, or any person, alleging an unlawful employment practice in violation of this Act against an employee described in section 2(2)(D). 2 U.S.C. 1301 et seq.; 2 U.S.C. 1301; 2 U.S.C. 1312(a)(1)
(d) Employees covered by of title 5, United States Code
- The powers, remedies, and procedures provided in title 5, United States Code, to an employing agency, provided in chapter 12 of that title to the Merit Systems Protection Board, or provided in that title to any person, alleging a violation of chapter 63 of that title, shall be the powers, remedies, and procedures this Act provides to that agency, that Board, or any person, respectively, alleging an unlawful employment practice in violation of this Act against an employee described in section 2(2)(E).
- Employees covered by of title 5, United States Code
(e) Remedies for State employees
- (1) Waiver of sovereign immunity
  - A State’s receipt or use of Federal financial assistance for any program or activity of a State shall constitute a waiver of sovereign immunity, under the 11th Amendment of the Constitution or otherwise, to a suit brought by an employee of that program or activity under this Act for equitable, legal, or other relief authorized under this Act.
- (2) Official capacity
  - An official of a State may be sued in the official capacity of the official by any employee who has complied with the procedures of subsection (a)(3), for injunctive relief that is authorized under this Act. In such a suit, the court may award to the prevailing party those costs authorized by section 722 of the Revised Statutes (). 42 U.S.C. 1988
- (3) Applicability
  - With respect to a particular program or activity, paragraph (1) applies to conduct occurring on or after the day, after the date of enactment of this Act, on which a State first receives or uses Federal financial assistance for that program or activity.
- (4) Program or activity defined
  - In this subsection, the term program or activity has the meaning given the term in section 606 of the Civil Rights Act of 1964 (). 42 U.S.C. 2000d–4a
(f) Collective bargaining agreement resolution
- In addition to the enforcement mechanisms set forth in this section, an employee or labor organization may also use a grievance and arbitration procedure of a collective bargaining agreement to enforce collectively bargained provisions relating to paid annual leave.

SEC. 7. Effect on other laws and existing agreements

(a) State or municipal laws
- (1) Greater leave rights
  - Nothing in this Act shall be construed to supersede any provision of any State or local law that provides greater paid annual leave or other leave rights to employees or individuals than the rights established under this Act.
- (2) Distinguish between types of leave
  - For the purposes of this subsection, a State or municipal law that does not distinguish between time earned for paid annual leave and time earned for sick leave shall be deemed a law that provides lesser paid annual leave or other rights to employees or individuals than the rights established under this Act.
(b) More protective agreements
- Nothing in this Act shall be construed to diminish the obligation of an employer to comply with any contract, collective bargaining agreement, or any employment benefit program or plan that provides greater paid annual leave or other leave rights to employees or individuals than the rights established under this Act.
(c) Less protective agreements
- The rights established for employees under this Act shall not be diminished by any contract, collective bargaining agreement, or any employment program or plan.

SEC. 8. Awareness campaign

(a) In general
- Not later than 1 year after the date of enactment of this Act, the Secretary shall carry out a public awareness campaign to inform the public about the paid annual leave established under this Act, which shall include information about—
  - the rights provided to an employee under this Act; and
  - resources available to an employee if the employee believes the rights provided under this act have been violated.
(b) Authorization of appropriations
- There are authorized to be appropriated such sums as are necessary to carry out this section.

SEC. 9. Effective dates

(a) Effective date
- This Act shall take effect 180 days after the date of enactment of this Act.
(b) Collective bargaining agreements
- In the case of a collective bargaining agreement in effect on the effective date prescribed under subsection (a), the Act shall take effect on the earlier of—
  - the date of the termination of such agreement;
  - the date of any amendment, made on or after such effective date, to such agreement; or
  - the date that occurs 18 months after such effective date.