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mandatory PTO payout at termination?

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  • mandatory PTO payout at termination?

    We are based in Texas and have employees in multiple states. Currently it is our policy to not pay out unused PTO upon termination, regardless of reason. In researching this policy, it appears that some states require unused PTO to be paid out upon termination. Unfortunately, I can not find a conclusive or reliable source for the requirements for each state. I have visited all of the states' Departments of Labor websites and gotten some good information, but some do not even address this topic at all. Can anyone direct me to a reliable source for this info? Also, does it matter if the PTO is "earned" versus "accrued"? We currently give PTO on 6 month anniversary, then January 1 every year thereafter. It is not accrued per pay period. Thank you in advance for your input!

  • #2
    Earned and accrued are, for purposes of this topic, essentially the same thing. In the state of California, PTO must accrue as worked. In all other states, if you want to give it to the employees in a block you can, but in the states where payout is required by law, you would then be required to pay out a full year's worth of PTO even if they only worked one day after the day it was provided.

    I'm PMing you the link to a site where you can get a free report detailing the requirements of each state. You may need to register with the site to read it, but registration is free and immediate.
    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.


    • #3

      Can you send me that link as well?


      • #4

        Would you send the link to me as well? Thanks.