Human Resource Blog

Maine PTO

I resigned from my position in Maine and had several hours of PTO earned. I was paid all but 56 hours of it. When I questioned my former employer about the 56 hours I was still owed, I was told I lose them because they include holiday hours. Is that correct?

As mentioned in a previous post, Maine has some of the toughest laws of any state about vacation pay. Along with California, Illinois, Louisiana, Massachusetts, North Carolina, Oregon, Rhode Island and Tennessee, Maine requires that employees be paid for all accrued vacation time when resigning or being terminated (fired) from a job.

However, the complication arises when a company gives PTO or paid time off instead of vacation time. PTO generally includes vacation time, sick time and holidays. Companies lump all the time off together under PTO. For example, a company may give employees 14 days of vacation, 7 paid holidays and 5 paid sick days per year. If that company switches to PTO, the employee may simply receive 26 days of PTO per year. The employee may use the PTO in any way that he or she likes – all at once for a long vacation or sporadically to take days off when their children stay home from school with the sniffles.

According to sources at the Maine Department of Labor, which enforces this law, the company is obligated to pay the employee for that portion of PTO which is considered vacation time. However, there is no legal requirement that companies in Maine pay an employee for accrued holiday pay or sick pay. So, if the company is saying that 56 hours of the employee’s PTO, or approximately 7 days, is holiday pay, the company is not under any obligation to pay for that time.

We double-checked this answer with Bob Brown, a wage and hour investigator with the Maine Department of Labor. According to Mr. Brown, the state accepts the company’s breakdown of PTO into sick time, vacation time and holiday pay. Since employees are entitled to payment only for accrued vacation time, it looks like the company does not owe the employee  in this case.