What You Need to Know About PTO Payment Laws By State
Each state possesses different payment laws regarding Paid Time Off (PTO). Here are the PTO payment laws by state.
| State | Statutory Requirements Addressing Vacation Pay | Use-It-or-Lose-It Policy | Payment of Accrued Vacation on Separation |
| Alabama | Not addressed by state statute | Not addressed by state statute | No addressed by state statute, but an employer’s formal vacation policy may not be unilaterally rescinded. Employers must notify employees in advance if electing to cease payments for accrued, unused vacation upon separation |
| Alaska | Not addressed by state statute | Not addressed by state statute | No addressed by state statute, but an employer’s policy/agreement determines if earned, or unused vacation is paid upon separation |
| Arizona | Earned vacation time are wages when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employment contract determines if earned, or unused vacation is paid upon separation |
| Arkansas | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employment contract determines if earned, or unused vacation is paid upon separation |
| California | Earned vacation time is considered wages | Prohibited by state law (Employers may place a practical accrual cap on vacation time) | Employees may not be deprived of unearned, unused vacation time regardless of separation reason unless both parties reach a willful agreement |
| Colorado | Earned vacation time is considered wages | Permitted by state law if the policy does not strip employees of vacation time/associated wages and is addressed in a written agreement between employer and employee | An employer must accurately pay and deliver all vacation pay to appropriate recipients upon employment separation |
| Connecticut | Wages do not include vacation time, but employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Delaware | Employers and employees are responsible for negotiating vacation pay | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| District of Columbia (D.C.) | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employment contract determines if earned, unused vacation is paid upon separation |
| Florida | Not addressed by state statute | Not addressed by state statute | Not addressed by state statute |
| Georgia | Not addressed by state statute | Not addressed by state statute | Not addressed by state statute |
| Hawaii | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Idaho | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Illinois | “Final compensation” refers to the “monetary equivalent of earned vacation” | Permitted by state statute, but employees must know about the policy and have a fair opportunity to use vacation time | An employer’s policy/agreement determines if earned, unused vacation is paid upon separation, unless both parties reach a willful agreement |
| Indiana | Employer-provided paid vacation is considered deferred compensation in place of wages | Permitted by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation. Employees are entitled to earn, unused vacation pay if no policy exists |
| Iowa | Earned vacation time is considered wages, and employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employment contract determines if earned, unused vacation is paid upon separation |
| Kansas | No state statute requires employers to provide vacation time, but an employer must provide a vacation policy in writing or display per employee request | Permitted by state statute | Employers may restrict vacation policies through, for example, proving employees only earn vacation on reaching the anniversary date and the employees separated before the anniversary. Employers must provide vacation pay established in company policy |
| Kentucky | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Louisiana | An employee must have accrued vacation time and be eligible to take the vacation at separation to receive payment for unused vacation time | Permitted by state statute | Employers must pay employees any accrued, unused vacation time upon separation |
| Maine | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Permitted by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Maryland | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | Employees are entitled to the cash value of any leftover earned, unused vacation if no written policy exists. An employer does not have to make payments if the employer established a written policy and notified employees unused vacation is forfeited in writing |
| Massachusetts | Earned vacation time is considered wages and employers must compensate employees for vacation pay | Permitted by state statute, but employers may establish a cap on vacation accrual if employees are fairly notified | Employers must pay employees any earned, unused vacation time upon separation |
| Michigan | Willfully contracted vacation pay is considered a fringe benefit, not wages | Not addressed by state statute | Employers must pay fringe benefits outlined in the written policy/contract and may not revoke/withhold any payments due upon employee separation |
| Minnesota | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Mississippi | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Missouri | Not addressed by state statute | Not addressed by state statute | Final wages do not include vacation pay |
| Montana | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Prohibited by state statute, but employers may implement policies placing a maximum cap on vacation time | An employer must pay vacation upon separation if it appears in writing or verbally within a contract |
| Nebraska | Vacation pay is a type of fringe benefit and considered wages | Prohibited by state statute | Employers must pay employees any earned, unused vacation time upon separation |
| Nevada | Not addressed by state statute | Not addressed by state statute | Employers may restrict accrued, unused pay upon separation so long as policy is consistent |
| New Hampshire | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Permitted by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| New Jersey | Accrued and unused vacation are not wages | Not addressed by state statute | Earned, unused vacation is not considered wages unless an employer’s policy, agreement, or union contract states otherwise |
| New Mexico | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| New York | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Permitted by state statute, but employers must give prior notice of the policy | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| North Carolina | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Permitted by state statute, but employers must notify employers of the policy in writing | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| North Dakota | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Permitted by state statute, but employers must provide employees notice of the policy and fair opportunity to use vacation time | Employers must pay employees any earned, unused vacation time before separation. A private employer may withhold payment if: the employer gave written at the time of hiring about the policy, the employee has been employed for less than one year, the employee gave fewer than five days’ notice before separation |
| Ohio | Not addressed by state statute | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Oklahoma | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Permitted by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Oregon | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Pennsylvania | Earned vacation time is considered wages when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Rhode Island | Earned vacation time is considered wages after one year of service when an employer has policy/practice of paying employees for this time | Not addressed by state statute | Employers must pay employees accrued vacation pay if an employee served one year or more at the company |
| South Carolina | Earned vacation time is considered wages after one year of service when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| South Dakota | Not addressed by state statute | Not addressed by state statute | Not addressed by state statute, so not required |
| Tennessee | Employers do not have to create a written vacation policy if electing to provide vacation time | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Texas | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Utah | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation, unless the employer implements a use-it-or-lose-it policy explicitly stating leave does not accrue and employees are not paid for unused leave |
| Vermont | Employees who offer paid vacation time are liable to employees for those benefits | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Virginia | Employers do not have to establish a vacation pay policy | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| Washington | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
| West Virginia | Earned vacation time is considered wages after one year of service when an employer has policy/practice of paying employees for this time | Not addressed by state statute | An employer does not have to pay upon separation if a written policy stating accrued vacation time will not be paid at separation |
| Wisconsin | Earned vacation time is considered wages after one year of service when an employer has policy/practice of paying employees for this time | Not addressed by state statute | Employers are not required by state law to pay employees upon separation |
| Wyoming | Employers who offer vacation pay are bound by the terms of the employment contract with employees | Not addressed by state statute | An employer’s policy or employee contract determines if earned, unused vacation is paid upon separation |
Related: Can I Sue My Employer For Lying?
All information regarding PTO laws by state is accurate as of April 4th, 2022 and is subject to change. Employees should consult the statutes in their occupation state to learn more about how specific PTO laws may apply.
Related: Can an Employer Sue an Employee for Poor Performance?
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