Paid Time Off/Employee Leaving Company

I've read several different renditions regarding paying "paid time off" when an employee leaves the Company. I have a client who wants to state in the Handbook that the Company does NOT have to paid accrued time off when an employee leaves IF the employee does not give a 2-week notice or only gives 1-week notice.

HELP! My understanding is that, if a Company has a paid time off policy, the employer must pay out accrued time when the employee leaves. We are indicating that employees may roll-over 5 days of PTO in the following year - if not used, will lose at year end. Pretty sure this is OK.

THANKS!

Comments

  • 6 Comments sorted by Votes Date Added
  • It's my understanding, and the rule that I've been following is, that it's all in the wording of the policy. Don't call it "earned" when referring to PTO. Be sure to refer to it as a gift from the company, therefore it's forfeited upon separation from the company. If you word it as earned and acrued time then courts will more than likely require you to pay it no matter the separation terms.
  • For this issue you need to look at the individual state laws. Regardless of what your handbook says, if your employee resides in a state with PTO payout laws, you are required to pay up. In most states with payout laws, they refer to the payout of all accrued but unused PTO.
  • [COLOR=#000000][FONT=Arial][SIZE=2]I'm with Still Needs Coffee.

    You need to be sure you check state laws that may apply. You can find state requirements for payment of earned vacation and/or sick days upon separation in [I]50 Employment Laws in 50 States[/I], available at HRHero.com. Also, [/SIZE][/FONT][/COLOR][FONT=Arial][SIZE=2]HRLaws.com subscribers can find information about this [URL="http://www.hrlaws.com/node/1075038"]here[/URL].

    [/SIZE][/FONT]Sharon
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