Does the contractor invoice the government for PTO (paid time off) for a professional service with fringe benefits. If so what is the FAR Clause or guidance for submitting/reviewing invoices for paid time off?
The contract type plays a significant role in the answer to your question, but the short answer is yes PTO (paid time off) falls under fringe benefits.
In FFP contracts we pay according to the CLIN structure; frequently using a monthly unit of measure with a fully burdened rate for services. So, you wouldn't see PTO addressed on a proper invoice submitted in accordance with FAR 52.232-1.
A T&M/Labor Hour contract is governed by clause FAR 52.232-7 and speaks to paying for "labor performed". In that scenario any PTO that a contractor provides to an employee would have to be built into their indirect rates and would not be on called out on a voucher submitted to the Government.
A Cost contract is governed by FAR 52.216-7 and would allow a contractor to bill according to their accounting policies for actual costs incurred. However, PTO would most likely be covered in an indirect rate addressed by paragraph (d) of the clause and wouldn't be itemized on a voucher.