It Isn’t Just the Time They Work You Need to Worry About
Posted on 25-Jun-08 by The Timekeeper
p>So, when you terminate an employee (or they quit) with unused paid time off, do you need to pay them for the time?
According to a recent article on Law.com, the answer is a resounding “it depends.”
Whether or not you’re required to pay out accrued, unused paid time off (and if so, how much) is a matter of state law. So the answer will be different depending on where you’re located.
Some states require payout, period. Some only require payout for things like vacation. Others leave it up to the employer. And some don’t address the issue at all.
If it’s found you didn’t pay out when you should have, you could be liable for not only the time, but also for attorneys’ fees, court costs and damages — which could make this a very expensive issue. According to the article, unclear employer policies are usually the culprit when an former employee files a claim for unpaid time off benefits.
The best way to guard against these types of suits is to make sure you policies are clear and complete, and in conformity with applicable state law. Your lawyer should be able to help you with that. (And then make sure you follow those policies, of course!)
The article goes on to enumerate several areas of ambiguity and give suggestions for how to clarify your policies. Might be worth a read before you sit down with your lawyer to discuss what you need to do to get your PTO policies in shape.
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