Human Resource Blog

PTO or Vacation in Virginia

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If an employee quits their position and has alot of vacation time built up do we have to pay them for it all?

The answer will depend upon

a)     What state the employer is in

b)     Company policy regarding vacation pay

c)      How similar situations have been handled in the past

But first, it’s important to distinguish between PTO and vacation time. A number of states consider earned vacation “wages” and require the employer to pay all wages upon termination. Other states simply enforce company policy, or presume that employees will be paid for earned vacation upon termination.

However, very few, if any, states require that employers pay workers for earned sick time and personal time.

PTO or Paid Time Off is a combination of vacation time, sick time and personal time. If an employee has 4 weeks of PTO, that may be the equivalent of 2 weeks of vacation, plus one week of paid sick leave and one week of paid personal leave. This is an important distinction, because even in most states that require payment for vacation, the state normally depends upon the employer to determine what portion of PTO is “vacation time.”

Of course, the employer has to apply this consistently, and can’t claim that an employee who has 4 weeks of PTO only has 2 days of vacation time, with the remainder being sick or personal time.

Virginia law does not consider vacation time “earned” wages, so payment is not mandated. However, if the company has a written or unwritten policy of paying employees for vacation time (or even the entire PTO), then according to DOLI, the Virginia Department of Labor and Industry, the employee may be entitled to payment under contract law.

If the company has paid other workers PTO upon resignation in the past, even if the employee had accumulated less PTO, it probably is wise to do so now. Not paying the employee earned PTO could possibly be considered illegal discrimination based on race, color, gender, age (if over 40) or another protected status.

If the employer has not paid earned vacation or PTO to workers who resigned in the past, there is no need to start now.

However, if the employer has a written PTO or vacation policy, in the employee handbook, then the courts will almost certainly require them to honor that policy.

An employee who wished to file a claim for unpaid vacation could do so by contacting the Clerk of the General District Court to file a Warrant in Debt against the employer. Some employees engage an attorney for this purpose, and others do not.