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Dec02

PTO Payout - Alabama

Benefits
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Our Company has a payout clause in its PTO policy which allows employees to rollover a max of 40 hours of earned but unused PTO time at their anniversary date. Anytime over the 40 hours would be paid to the employee at 100% of its value. Starting next year this policy will change in that anytime over the 40 hour rollover will be paid at 50% of its value. I want to know if this is legal - it will apply to both hourly and exempt employees.

This is not only lawful, it is exceptionally generous of you as an employer.

In any state except California, you could permit employees to roll over 40 hours of PTO and lose the rest on their anniversary date without any payout. You could even implement a *use it or lose it* policy where employees could not roll over any PTO. So offering any payout at all is extremely generous, and it is more than 90% of employers offer.

There is no requirement that you must keep the same PTO policies year after year. So you could lawfully offer 100% payout last year, 50% this year and nothing next year.

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This entry was posted on Wednesday, December 2nd, 2009 at 7:46 am and is filed under
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