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Aug09

PTO Payout for Termed employees

Is our company required by law in the state of Texas to pay out all PTO time accrued to an emplyee that we terminated?

Probably not, unless you have a written policy that specifies you will. The Texas Payday law is the relevant statute on the state level. That law does not require that employers offer benefits such as paid vacation time. However, if the employer offers vacation and has a written policy, the law requires the employer to abide by that policy. If there is no written company policy that employees will be paid for vacation, then it is not required. (Unwritten policies or past precedents are more of a grey area under Texas law.)

Like most states, Texas does not directly address the issue of PTO or paid time off. While employees often understand PTO to be vacation pay, in reality it is a combination of sick time, personal time, holiday pay and paid vacation. In the majority of states, the employer is allowed to determine how much PTO is vacation time. So even if the employer is required to pay vacation time, they probably will not be required to pay for all the PTO the employee has earned.

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This entry was posted on Saturday, August 9th, 2008 at 5:10 pm and is filed under
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