Human Resource Blog

What states other than California do DO NOT support a use it or lose it PTO policy

noticed that you mention Illinois and New Jersey but not a list of states.

Can you provide that information?

Thanks,

Yes, here is the complete, comprehensive list of states where a *use it or lose it* vacation  or PTO policy is unlawful:

California

Thats it. This policy is lawful in every other state, at this writing. It is being challenged in the courts in Maryland, and in one or two other localities, but it is lawful in every state except California, including Illinois and New Jersey, as long as the policy is in writing.

By *use it or lose it* PTO policy, we presume that you mean a written policy that employees must use accrued PTO by a specific date (usually the end of the year or their anniversary date) or lose the accrued PTO time, without payment for it.

In several states, a terminated employee must be paid for any accrued but unused vacation. This includes the portion of PTO that is comparable to vacation pay. However, that is completely different from a *use it or lose it* policy.

Most states have laws about vacation time and sick leave, rather than PTO. In many states, the vacation laws apply to that portion of PTO that is comparable to vacation time. If you have a question about vacation or sick leave laws in a specific state, please feel free to post it.