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Illinois PTO/Vacation Law

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  • Illinois PTO/Vacation Law

    I do understand in the State of IL the law states that you have to pay out all accrued vacation/PTO time to terminated employees. My question is do employeers have any rights for employees that are terminated for theft, willfull miscontuct, etc or even for employees that work ie for a year then take their vacation and never show up back to work again...

    In the law I was confused with the definition of PTO. It reads that all PTO hours are considered as vacation time unless otherwise specified? can an employer have a policy that states 1/3 of the PTO time you accrue is considered sick time and upon termination you will recieve 2/3 of your PTO balance.

    In IL is it legal for an employer to say that you begin accruing PTO as of a certain date (and wont be paid for if you are terminated) but you are not eligible to use your PTO until a certain date (if terminated after this you would be paid your PTO balance.) Example start accruing after 6mo but not able to use until 1 year with the company. If termed between 6mo and 1 year would an employer have to pay that out?

    I recently come from a different state.

  • #2

    The law itself says:
    Sec. 2. For all employees, other than separated employees, "wages" shall be defined as any compensation owed an employee by an employer pursuant to an employment contract or agreement between the 2 parties, whether the amount is determined on a time, task, piece, or any other basis of calculation. Payments to separated employees shall be termed "final compensation" and shall be defined as wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed the employee by the employer pursuant to an employment contract or agreement between the 2 parties. Where an employer is legally committed through a collective bargaining agreement or otherwise to make contributions to an employee benefit, trust or fund on the basis of a certain amount per hour, day, week or other period of time, the amount due from the employer to such employee benefit, trust, or fund shall be defined as "wage supplements", subject to the wage collection provisions of this Act.
    Illinois' website isn't as specific as California's (which has a similar rule). So, you will want to check with the state for verification. HOWEVER, I believe that the states are similar in that the rule regarding payment of vacation (and the prohbition of "lose it or use it" rules) pertains only to vacation (and holiday pay in the case of Illinois). Sick pay benefits are not covered by the law. So, if an employer designates some days off as only and specifically due to illness/injury and the employee may not access that time off for any other reason, that portion of the time off benefits do not need to be paid at the time of termination.
    Illinois does have rules regarding the payment of vacation but it does not restrict the emplooyer's authority to schedule the vacation. So, I believe that restricting the use of the vacation until after being there 6 six months is probably legal. However, check with the state to be sure.
    Lillian Connell

    Forum Moderator


    • #3
      Labor Laws Concerning Vacation In Illinois

      Can You Please Direct To Website About Illinois Labor Law About Vacation? Thanks


      • #4
        The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.


        • #5
          Question of Payout on Amended PTO Policy

          This thread has been very helpful, but after reading the Illinois law, I find the following situation unanswered and I hope somebody can help...

          The employer (who is located in Florida and has employees in many states) had a previous PTO payout policy that stated:
          Upon termination of employment from company, up to a maximum of 80 hours of accrued vacation time will be cashed out to an Associate. An area Vice President may exercise the option to pay an Associate's accrued vacation time in lieu of notice.

          On 08/29/05 the employer communicated an amended PTO Policy, which read:
          All existing sick, vacation or personal hours are converted to your new PTO balance. Previous methodologies of awarding sick, vacation and personal time are simply combined into one "bucket", PTO, at the historical accrual rates.

          Which is fine, but it also went on to say:
          Associates will not be paid for their unused PTO if they leave the employ of company after 08/26/05. We feel that PTO is a benefit to be enjoyed ratably during one's employment - it provides the necessary balance between the sizable commitment we ask from all of our associates on a daily basis, and the time one should spend with their family, friends or personal interests. It is not meant to supplement one's income or be a deferred savings plan, thus, for anyone leaving the employ of company after 08/26/05, they will not be paid their unused PTO balance.

          Notice that the communication to employees of the change was on 08/29/05, but the revised policy states: if they leave the employ of company after 08/26/05.

          It would seem to me that this would be unfair to employees with accumulated PTO - regardless whether this is legal - in that it gives them no opportunity to lower thier accrued PTO balances before leaving the employ of the company and that what would be categorized as earnings due are kept by the employer.

          In any case, I have three questions:
          1) Is the policy of non-payout of accrued PTO to an Illinois employee legal?
          2) Is this policy legal in most states?
          3) If it is legal, does the employer still have to payout employee's PTO accrued as of the date of the policy change?


          • #6
            1) Is the policy of non-payout of accrued PTO to an Illinois employee legal? No. Illinois requires the payout of earned but unused vacation upon separation.

            2) Is this policy legal in most states? I'd estimate about 50% of States have a law specifically requiring the payout of vacation upon termination.

            3) If it is legal, does the employer still have to payout employee's PTO accrued as of the date of the policy change? No, and what this employer is proposing (to dump everything into one paid time off bucket) is perfectly legal and rather common. Any illegalities arise in individual States if the employer refuses to pay out earned PTO in those States that prohibit that.