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PTO Year End rules - Illinois

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  • PTO Year End rules - Illinois

    One of the hats I wear in our small non-profit agency is HR Manager.
    I am trying to update our HR policies and am running into some problems.

    Our current policy is stated in our employee handbook & agency operating manual as follows:

    A. For FT employees, PTO time is accrued each pay-period based on the number of hours worked to a max of 152 per year.

    B. At the end of the year - exempt employees can carry over up to 40 hours into the next calendar year, and any over 40 are forfeited.

    C. For non-exempt FT employees, at the end of the year, they have 2 choices:
    1. Carry over up to 40 hours, forfeiting the rest
    or
    2. Elect to have half their remaining PTO hours paid out at their regular hourly rate & forfeit the remaining half.

    Legal or no?
    I have read through the Administrative codes & Vacation FAQ on the Illinois DOL website, and it seems to only address separated employees being entitled to 'earned' PTO upon final paycheck - which is our policy already.
    I can see that 'use it or lose it' is permitted, with conditions. But I feel like our policy is an odd combination.
    Our agency lawyer (Board Member) that previously reviewed & approved the policy specializes in family law arbitration, not labor law, and so I do not know that I entirely rely on what direction we received from her.

    Any insight??
    TIA!

  • #2
    As a general rule, if a state considers PTO wages the time can not be forfeited. Realistically, I'd contact the state DOL and see what they say. Ultimately it will be they who answer the question should an employee file a claim.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      Illinois law allows both vacation time and PTO to be forfeited at a specific time (not on termination) as long as the employer has allowed a reasonable opportunity for the employee to use the time. Since all PTO could be forfeited at year end, I don't see why giving an employee of carrying over 40 hours and forfeiting the rest or getting paid for half and forfeiting the rest would be an issue. Either option is better than forfeiting it all.

      I have never seen it done in practice, but it seems consistent with the general scheme in Illinois.

      I agree with ElleMD that it might be useful to ask what the Illinois DOR says, but understand that what one employee tells you doesn't carry much weight unless they can point you to a published rule or policy.
      David K. Staub (www.illinoisbusinessattorney.com)
      Forum posts are not legal advice, are for informational and educational purposes only, and are not a substitute for proper consultation with legal counsel.

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      • #4
        Thank you!
        I did speak with the DOL in IL, and they would not directly answer the question.
        They just pointed me to the published rules, and said anything further would constitute legal advice.

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