(III) includes— 
(aa) any person who acts, 
directly or indirectly, in the inter-
est of an employer covered by 
this clause to any of the employ-
ees of such employer; and 
(bb) any successor in inter-
est of such an employer; and 
(IV) includes any carrier (as such 
term is defined in section 1 of the 
Railway Labor Act (45 U.S.C. 151)) 
and any carrier by air (as described in 
section 201 of such Act (45 U.S.C. 
181)). 
(ii) PUBLIC
AGENCY.—For purposes 
of clause (i), a public agency, as defined in 
section 3(x) of the Fair Labor Standards 
Act of 1938 (29 U.S.C. 203(x)), shall be 
considered to be a person engaged in com-
merce or in an industry or activity affect-
ing commerce. 
(C) PREDECESSORS.—Any reference in 
this paragraph to an employer shall include a 
reference to any predecessor of such employer. 
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(4) FLSA DEFINITIONS.—The terms ‘‘employ’’, 
‘‘employee’’, ‘‘person’’, and ‘‘State’’ have the mean-
ings given the terms in section 3 of the Fair Labor 
Standards Act of 1938 (29 U.S.C. 203). 
(5) PAID ANNUAL LEAVE.—The term ‘‘paid an-
nual leave’’— 
(A) means paid vacation leave and paid 
personal leave provided to an employee by the 
employer of such employee to be used during 
period in which the employee would otherwise 
work; and 
(B) does not include— 
(i) paid or unpaid family and medical 
leave provided by the employer or required 
by Federal, State, or local law; 
(ii) leave provided under the Family 
and Medical Leave Act of 1993 (29 U.S.C. 
2601, et seq.); 
(iii) sick leave provided by the em-
ployer or required by Federal, State, or 
local law; 
(iv) bereavement leave provided by the 
employer or required by Federal, State or 
local law; 
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(v) leave provided by the employer or 
required by Federal State, or local law for 
purposes related to adoption or fostering of 
a child; 
(vi) leave related to domestic violence, 
sexual assault, or stalking provided by the 
employer or required by Federal, State, or 
local law; 
(vii) leave provided by the employer or 
required by Federal, State, or local law 
with respect to a public health emergency; 
(viii) absence or paid leave under 
workers’ compensation or a disability plan; 
(ix) leave provided by the employer or 
leave required to be provided by Federal, 
State, or local law for holidays established 
by Federal, State, or local law; or 
(x) leave provided by the employer or 
required by Federal, State, or local law for 
jury duty, civic duty, or to vote. 
(6) RAIL
CARRIER.—The term ‘‘rail carrier’’ 
has the meaning given such term in section 10102 
of title 49, United States Code. 
(7) SECRETARY.—Unless otherwise specified, 
the term ‘‘Secretary’’ means the Secretary of Labor. 
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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 em-
ployer not less than 1 hour of paid annual leave for 
every 25 hours worked. 
(2) LIMITATION.— 
(A) IN GENERAL.—For purposes of com-
plying 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
AN-
NUAL LEAVE.—An employee shall begin to earn paid 
annual leave at the commencement of employment of 
such employee. 
(4) OVERTIME EXEMPT EMPLOYEE.—For pur-
poses of this section, where an employer is not re-
quired by the Fair Labor Standards Act of 1938 to 
maintain and preserve records of hours worked be-
cause an employee is exempt from minimum wage or 
overtime requirements under such Act (29 U.S.C. 
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213(a)), the employee shall be deemed to work 40 
hours in each workweek. 
(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 an-
nual 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 pe-
riod 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 pur-
poses of subparagraph (A), with respect to a 
tipped employee (as defined in section 3(t) of 
the Fair Labor Standards Act of 1938 (29 
U.S.C. 203(t))), such an employee shall be com-
pensated, for the period that such employee is 
using paid annual leave, at a rate equivalent to 
the higher of— 
(i) the Federal minimum wage; 
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(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 em-
ployee 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— 
(A) hourly increments; or 
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