{"id":220835,"date":"2025-05-03T12:51:06","date_gmt":"2025-05-03T12:51:06","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/legal\/qa-paying-out-pto-at-termination-employers-lawyers-blog\/"},"modified":"2025-05-03T12:51:06","modified_gmt":"2025-05-03T12:51:06","slug":"qa-paying-out-pto-at-termination-employers-lawyers-blog","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=220835","title":{"rendered":"Q&#038;A: Paying Out PTO At Termination | Employers&#8217; Lawyers Blog"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div>\n<div id=\"attachment_1759\" style=\"width: 160px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" aria-describedby=\"caption-attachment-1759\" class=\"size-thumbnail wp-image-1759\" src=\"https:\/\/www.employerslawyersblog.com\/wp-content\/uploads\/2017\/06\/wiletsky_mark_gallery_directory-150x150.jpg\" alt=\"Mark Wiletsky\" width=\"150\" height=\"150\" srcset=\"https:\/\/www.employerslawyersblog.com\/wp-content\/uploads\/2017\/06\/wiletsky_mark_gallery_directory-150x150.jpg 150w, https:\/\/www.employerslawyersblog.com\/wp-content\/uploads\/2017\/06\/wiletsky_mark_gallery_directory-300x300.jpg 300w, https:\/\/www.employerslawyersblog.com\/wp-content\/uploads\/2017\/06\/wiletsky_mark_gallery_directory.jpg 358w\" sizes=\"auto, (max-width: 150px) 100vw, 150px\"\/><\/p>\n<p id=\"caption-attachment-1759\" class=\"wp-caption-text\">Mark Wiletsky<\/p>\n<\/div>\n<p>by\u00a0<a href=\"https:\/\/www.hollandhart.com\/mbwiletsky\">Mark Wiletsky<\/a><\/p>\n<p><strong><em>Question: <\/em><\/strong><em>If we offer unlimited paid time off (PTO) and employees don\u2019t accrue PTO, do we have to pay anything out at termination?<\/em><\/p>\n<p><strong>Answer:<\/strong> Generally, the answer is no, but there is limited case law on this question and the answer may change based on how the unlimited PTO is administered.\u00a0 Under Colorado and other state laws, vacation is considered is a wage.\u00a0 Therefore, vacation cannot be forfeited and any accrued, unused vacation must be paid upon separation from employment.\u00a0 Paid Time Off (PTO) is typically viewed as a form of vacation and, therefore, it is arguably subject to the same rules.<\/p>\n<p>With unlimited PTO, however, no PTO is accrued.\u00a0 Hence, no PTO is payable upon termination of employment.\u00a0 But that can change if the unlimited PTO is not truly unlimited.\u00a0 The Colorado Division of Labor and Employment provides the following guidance on this topic:<span id=\"more-2898\"\/><\/p>\n<p style=\"padding-left: 40px;\">If an employer provides \u201cunlimited PTO,\u201d that ordinarily is not payable upon separation, because the amount isn\u2019t \u201cdeterminable.\u201d But if an employer says it offers \u201cunlimited PTO,\u201d yet actually doesn\u2019t let employees take more than a certain amount of paid time off, then what it provides isn\u2019t really \u201cunlimited,\u201d it\u2019s a limited, determinable amount of PTO.<\/p>\n<p style=\"padding-left: 40px;\"><strong>Example 4:<\/strong> Company C states that it provides \u201cunlimited\u201d PTO, but doesn\u2019t actually let employees take over 120 hours in any year. What Company C provides isn\u2019t actually \u201cunlimited\u201d PTO, it\u2019s 120 hours of PTO per year. So departing employees must be paid any unused portion of their 120-hour allotment.<\/p>\n<p>In other words, a cap \u2013 even an informal one \u2013 placed on the use of unlimited PTO may result in the employer owing accrued PTO upon separation.\u00a0 And, because the employer may not track the use of unlimited PTO, it can be difficult to defend against a challenge seeking payment under such circumstances.<\/p>\n<p>To avoid potential issues, be sure the policy and practice does not limit PTO to a specific amount.\u00a0 That does not mean an employee should be allowed to take off time whenever he or she wants.\u00a0 The employer always has the right to manage PTO to ensure deadlines and other business needs are being met.\u00a0 Also, if the employee is not meeting productivity standards due to excessive time away, the employer could deny requests for further time off.<\/p>\n<p>Unlimited PTO policies can offer more flexibility and eliminate the need to payout accrued time off upon termination, but as with all policies, the devil is in the details.<\/p>\n<div class=\"printfriendly pf-button pf-button-content pf-alignleft\">\n                    <a href=\"#\" rel=\"nofollow\" onclick=\"window.print(); return false;\" title=\"Printer Friendly, PDF &amp; Email\"><br \/>\n                    <img decoding=\"async\" src=\"https:\/\/www.employerslawyersblog.com\/wp-content\/uploads\/2016\/08\/share-icons.jpg\" alt=\"Print Friendly, PDF &amp; Email\" class=\"pf-button-img\" style=\"\"\/><br \/>\n                    <\/a>\n                <\/div>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>Mark Wiletsky by\u00a0Mark Wiletsky Question: If we offer unlimited paid time off (PTO) and employees don\u2019t accrue PTO, do we have to pay anything out at termination? Answer: Generally, the answer is no, but there is limited case law on this question and the answer may change based on how the unlimited PTO is administered.\u00a0 [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":220836,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[97],"tags":[3767,13856,14075,11085,41307,28589],"dealstore":[],"offerexpiration":[],"class_list":["post-220835","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal","tag-blog","tag-employers","tag-lawyers","tag-paying","tag-pto","tag-termination"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Q&amp;A: Paying Out PTO At Termination | Employers&#039; Lawyers Blog - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=220835\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Q&amp;A: Paying Out PTO At Termination | Employers&#039; Lawyers Blog - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Mark Wiletsky by\u00a0Mark Wiletsky Question: If we offer unlimited paid time off (PTO) and employees don\u2019t accrue PTO, do we have to pay anything out at termination? 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