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In this tutorial, Katie from Gusto discusses setting up a Paid Time Off (PTO) plan. PTO encompasses sick days, holidays, and vacation days, which can be managed separately or as a single pool of days off. The video focuses solely on these categories and excludes other types of leave like FMLA, military, or jury duty. On the federal level, businesses are not required to offer PTO, but local regulations may vary. Offering PTO is recommended as it aids in recruiting and retaining a strong team. The video promises to guide viewers through the steps needed to create an effective PTO plan, starting with the first step.