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What states require Accrued Paid Time Off (PTO) to be paid after an employee leaves or is terminated from a company ?

Explanation of PTO or Vacation Payout Rules when an Employee Resigns or is Let Go by the Company.

Companies should be very specific about their PTO policies, particularly related to payout of accrued PTO when an employee resigns or is terminated from the company.

Federal law doesn’t mandate if Accrued Vacation or Accrued Paid Time Off (PTO) must be paid by employers when an employee is separated by the company, either voluntarily or involuntarily. However, state regulations may require payout.  Many employers may pay out accrued PTO as a benefit. It’s important to understand that PTO is typically earned as you work, and whether it’s paid out when you leave a company depends on a few factors:

  • Company Policy: Your company’s PTO policy outlines how PTO accrues, how it can be used, and whether it’s paid out upon separation. Always refer to this policy for specific details.
  • State Laws: Some states have laws that require employers to pay out accrued PTO when an employee leaves, regardless of the company’s policy. Other states might not have specific laws, leaving it to the employer’s discretion. See Table below entitled “States and Mandated PTO Payout Requirements” below.
  • Employment Contracts: In some cases, employment contracts might have clauses regarding PTO payout upon separation.

It’s crucial to check your company’s policy and your state’s laws to understand PTO payout.

States and Mandated PTO Payout Requirements

Below is a table of each state and their PTO payout requirements, with “Yes” indicating that PTO payout is required by law.  In some states, however, the company’s written policy may override the state’s default payout when allowed.
StatePTO Payout Required by State Law?NotesState Website
AlabamaNohttps://www.labor.alabama.gov/
AlaskaNohttps://labor.alaska.gov/lss/rights.htm
ArizonaNohttps://des.az.gov/
ArkansasNoState Employees only have required PTO payout.https://www.dws.arkansas.gov/
CaliforniaYeshttps://edd.ca.gov/
ColoradoYeshttps://cdle.colorado.gov/
ConnecticutNohttps://portal.ct.gov/dol
DelawareNohttps://dol.delaware.gov/
District of ColumbiaYeshttps://oag.dc.gov/
FloridaNohttps://www.floridajobs.org/
GeorgiaNohttps://dol.georgia.gov/
HawaiiNohttp://labor.hawaii.gov/
IdahoNohttps://www.labor.idaho.gov/
IllinoisYeshttps://ides.illinois.gov/resources/labor-laws.html
IndianaYesOnly required if employer does not state in writing that PTO is not paid out.https://www.in.gov/dwd/
IowaNohttps://www.iowaworkforcedevelopment.gov/
KansasNohttps://www.dol.ks.gov/
KentuckyNoNo state law mandates PTO payout.https://labor.ky.gov/
LouisianaYeshttp://www.laworks.net/
MaineYesSmall employers having 10 or less employees or public companies may not be required to payout accrued PTO.https://www.maine.gov/labor/
MarylandYesOnly required if employer does not state in writing that PTO is not paid out.https://labor.maryland.gov/labor/wagepay/
MassachusettsYeshttps://www.mass.gov/orgs/executive-office-of-labor-and-workforce-development
MichiganNohttps://www.michigan.gov/leo
MinnesotaYesOnly required if employer does not state in writing that PTO is not paid out.https://www.dli.mn.gov/business/employment-practices
MississippiNohttps://mdes.ms.gov/
MissouriNohttps://labor.mo.gov/
MontanaNohttp://dli.mt.gov/
NebraskaYeshttps://dol.nebraska.gov/
NevadaNohttps://detr.nv.gov/
New HampshireNohttps://www.nhes.nh.gov/
New JerseyNohttps://www.nj.gov/labor/
New MexicoYeshttps://www.nm.gov/departments-and-agencies/department-of-workforce-solutions/
New YorkNohttps://dol.ny.gov/
North CarolinaNohttps://www.labor.nc.gov/
North DakotaYesException for payout exist related to employee’s tenure and involuntary vs. voluntary.  Check state labor site for more details.https://www.jobsnd.com/
OhioYesOnly required if employer does not state in writing that PTO is not paid out.http://jfs.ohio.gov/
OklahomaNohttps://oklahoma.gov/labor/workplace-rights.html
OregonNohttps://www.oregon.gov/employ/Pages/default.aspx
PennsylvaniaNohttps://www.dli.pa.gov/
Rhode IslandYesOnly required for employees who have a tenure of at least one year.https://dlt.ri.gov/regulation-and-safety/labor-standards
South CarolinaNohttps://www.dew.sc.gov/
South DakotaNohttps://dlr.sd.gov/
TennesseeNohttps://www.tn.gov/workforce.html
TexasNohttps://www.twc.texas.gov/services/employment-law
UtahNohttps://jobs.utah.gov/
VermontNohttps://labor.vermont.gov/
VirginiaNohttp://www.vec.virginia.gov/
WashingtonNohttps://esd.wa.gov/
West VirginiaYesOnly required if employer does not state in writing that PTO is not paid out.http://www.workforcewv.org/
WisconsinNohttps://dwd.wisconsin.gov/
WyomingYesOnly required if employer does not state in writing that PTO is not paid out.https://dws.wyo.gov/

Changing Laws: The table above provides a general overview. Employment laws can change often. It’s always recommended to consult with legal counsel or your state’s labor department for the most up-to-date information.

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