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Employers often inquire about the differences between vacation time and PTO (Paid Time Off). Vacation time is a specific category designated by employers for personal use, such as travel or family activities, and is not typically for illness or medical appointments. While vacation time is not federally mandated, state laws vary in its definition and payment upon termination. For example, in Colorado, accrued vacation pay may be included in the definition of wages and is payable upon termination. Understanding these distinctions is essential for both employers and employees.