Pto

[Donna_Roueche]

I work for a company that is talking about layoffs. We have a PTO policy that states that accummulated PTO is forfeited upon termination regardless of the reason for the termination. So I need to know if this is legal to not pay the employees their accrued PTO when they are laid off because of reduction in force due to trying to save the company from closing...

 

[cbg]

That depends on state law. In what state is this?

But be aware; as long as your state does not require an employer to pay out unused vacation regardless, the policy you describe is legal. There is NO state where an employer is required to pay out PTO for involuntary terms only.

All 50 states fall into one of the following four categories:

1.) All unused vacation or PTO must be paid out at termination regardless of the reason of the term

2.) Unused vacation or PTO only needs to be paid out at term if there is a policy that says it will be

3.) Unused vacation or PTO must be paid out unless there is a policy that says it won't be

4.) Unused vacation or PTO need not be paid out, regardless of the reason for the termination

Categories 2 and 3 provide for qualifiers; PTO will be paid out (or won't be paid out) if x happens but not if y happens. The company is only required to follow what their policy says.

The policy you have referenced is legal if your state falls into categories 2, 3, or 4. ONLY if your state falls into category #1 is the policy illegal.

 

[Donna_Roueche]

This is in Texas

 

[cbg]

Texas is, unfortunately a Category 2 state.

 

[Donna_Roueche]

So our policy states " Pto is forfeited upon termination regardless of the reason for termination" You put in your reply unfortunately so does this mean the company must pay accumulated PTO wages?

 

[cbg]

I said unfortunately meaning, unfortunately for you, the employer does NOT have to pay out the PTO.

In Texas, the ONLY time they have to pay out PTO is when there is a written policy that expressly says it WILL be paid. In your case, there is a policy that expressly says it WON'T be paid. Therefore, regardless of the reason for the termination, neither Federal nor Texas law requires the employer to pay out unused PTO at term.

 

[Donna_Roueche]

Oh ok thanks for all your help.