February 23, 2021
Am I Entitled to PTO When I Leave My Job?
As the end of your employment with a company approaches, you may start to wonder: what will happen to my unused paid time off (PTO)? Will I be paid out for those days, or will they just disappear? This is a common question among employees, as paid time off (PTO) benefits are a valuable part of your overall compensation. Whether you’re resigning voluntarily, being laid off, or retiring, it’s important to understand your rights regarding any unused vacation, sick, or personal days. In this post, we will explore the laws surrounding PTO payouts at separation from different types of jobs. By understanding the guidelines in your state and details of your company’s PTO policy, you can make informed decisions and ensure you receive all compensation you are owed. Let’s get started with reviewing the top considerations around PTO and leaving a job.
Many employers offer paid time off [PTO] as a benefit of employment. These benefits come in various forms, such as, weeks of vacation per year of service or earned or accrued PTO based on hours of work during a set period of time. When we quit or are terminated, we are generally not entitled to PTO as a payout when we leave the company. In other words, there is no Minnesota law requiring an employer to pay out PTO time when we leave employment.
However, sometimes employers have a provision in their employee handbook stating circumstances in which they will pay out PTO to employees upon separation from employment. Most employers honor these handbook provisions without issue. But what if they don’t? Do these PTO provisions create a legal right to the PTO following separation such that an employee may recover the value of the PTO from an employer who refuses to pay it? Put another way, can an employee handbook create a contract right to PTO? The Minnesota Supreme Court recently answered, yes, it can.
Unused Vacation Time in Minnesota
In Hall v. City of Plainview, Plaintiff Donald Hall had accumulated over 1,700 hours of unused PTO at the time of his termination from the City of Plainview. A provision in the employee handbook stated, in relevant part, that “[w]hen an employee ends their employment with the City, for any reason, 100% of the accrued unused personal leave time will be paid up to 500 hours, unless the employee did not give sufficient notice as required by the policy.”
However, a disclaimer in the handbook also stated that the handbook “is not intended to create an express or implied contract of employment between the City of Plainview and an employee.” This provision further states that while the handbook “contained language dealing with the grievance procedure, discipline or termination, which the City may cho[o]se to follow…[t]hese provisions however, are not intended to alter the relationship between the City as an employer, and an individual employee, as being one which is ‘at will’, terminable by either at any time for any reason.” The question here was whether this disclaimer language unambiguously precluded Hall from arguing a unilateral employment contract obligating the employer to pay the accrued PTO. The Court held it did not.
Here, the Court concluded that the handbook language in this case contained “sufficiently definite terms regarding the City’s PTO program” as to create an enforceable unilateral employment contract between an employee and employer that required the employer to pay accrued paid time off (PTO) after an employee ends employment. While this does not mean that every employee handbook containing a PTO payout provision creates a contractual right to PTO, it does suggest a careful review of the handbook language is warranted. If you have a question about whether you may be entitled to PTO benefits upon separation, contact one of our employment law attorneys to discuss your rights.
What Happens to Your Unused Vacation Pay When You Quit
In conclusion, it’s important for both employees and employers to understand the laws and regulations surrounding PTO payout when leaving a company. While it can be frustrating to not receive a payout for accrued time off, it’s crucial to carefully review any employment contracts or company policies that may outline potential payouts. If such language is present, it is the employer’s legal obligation to honor that promise and provide appropriate compensation for unused PTO. However, in cases where there is no contractual agreement, it’s important for employees to manage their PTO effectively and use it before departing from a company. Ultimately, understanding your rights and responsibilities can help avoid any disputes or misunderstandings when it comes to PTO payouts.
But don’t hesitate to seek out expert advice if you find yourself in a situation where you believe you are entitled to a PTO payout but are being denied by your employer. Our team of experienced employment attorneys at Wanta Thome can provide guidance and support in navigating these complex issues. We believe that all employees deserve fair treatment and compensation for their hard work, and we are here to fight for your rights. So if you have questions or concerns about your PTO payout or any other employment-related issue, don’t hesitate to reach out to us today for a free initial consultation.
Remember, knowledge is power—and understanding the laws surrounding PTO payouts can help protect your interests as an employee. Companies have a responsibility to follow through on their promises and our team at Wanta Thome is dedicated to holding them accountable. Don’t let complicated legal matters intimidate you and don’t settle for less than what you deserve. Call us today and let us help you fight for your rights.
Contact Our Minnesota Employment Lawyers
The Minnesota employment lawyers of Wanta Thome PLC are committed to protecting the rights of all Minnesota employees. If you have questions about your employment rights, contact us for a free initial consultation.