Our company uses PTO for it's upper level managment and department heads. Rather than accruing the PTO time, each January 160 hours are added for them to use at their discretion through out the year. If they haven't used all of the PTO as of December 31 they loose it and receive a new 160 hours on January 1 of the following year.

Since this is not an accrued benefit are we required to pay out any remaining hours at the time of termination?

Maybe this site will help you.

http://www.dir.ca.gov/dlse/FAQ_Vacation.htm

It addresses several issues but they all seem to pertain to "earned" or "accrued" benefits. Since ours is not earned or accrued are the rules different for pay out at termination?

It addresses several issues but they all seem to pertain to "earned" or "accrued" benefits. Since ours is not earned or accrued are the rules different for pay out at termination?

Even though they are taken away, and new ones are issued every year, they are still given, and once given, they are a policy, as stated on that site, so sorry, I may be wrong, but I doubt it, they are thiers, and apon termination, unless otherwise stated on your policy's, you must pay them out. I do not see, in your first statement, a time that they actually have no p.t.o, so when terminated, whatever is left, is thiers, and should be paid. If by chance I am wrong, another senior member will let you and I know. Sorry I can not be of more help.

Vacation pay, in California, is accrued. Period. Hence, it must be paid out upon separation of employment. Use it or loose it policies are also illegal, although you may establish a accrual cap. (Not retroactively, of course).

Is this time in addition to vacation or some sort of other leave?

It may not be "accrued" on a regular basis as such, but it IS considered "earned" and vested as the time is worked.

What happens if the employee terminates on, say, June 30th, and had not taken any vacation in that calendar year. How much vacation would the company be paying out? 160 hours or 80 hours?