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Payment for PTO upon Termination of Employment

In Connecticut, must we pay for accumulated but unused PTO hours when an employee terminates employment? Is it enough to have a policy saying that unused PTO are uncompensated upon termination or is this illegall in our state?

In Connecticut, an employer that provides vacation or PTO time must comply with the terms of its established policy or employment contract.

An employer in Connecticut can legally establish a policy or enter into a contract denying employees payment for accrued vacation leave upon separation from employment or termination of employment.

If your current policy requires you to pay accrued vacation upon separation or termination, then you must pay out accrued vacation.

Connecticut law also states if your policy or employment contract is silent on paying out accrued vacation, then you do not need to payout vacation unless you have established a past practice for paying out vacation.

If your company’s intention is not to pay out accrued vacation time upon termination, then you should establish a policy stating that. And it is legal under Connecticut employment law.

This entry was posted on Saturday, January 12th, 2013 at 8:46 am and is filed under
Human Resources Management.
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