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Mar15

PTO Payout Upon Termination

My employer grants PTO (paid time off) and does not apply a percentage to designate PTO as vacation days or sick days. My employer also states that unused PTO will not be paid out upon termination. I contacted the Colorado Department of Labor and was told employers in Colorado are not required to pay out any unused PTO days upon termination. The response from the Colorado Department of Labor seems to conflict with the information provided on your website. Can you help me understand this issue better?

Thank you.

The following PTO (vacation) rules apply in Colorado.

An employer in Colorado can lawfully establish a policy or enter into a contract denying employees payment for accrued vacation leave upon separation from employment, termination  and if the employee separates from employment if they fail to comply with specific requirements, such as giving two weeks’ notice or being employed as of a specific date of the year.  See Thompson v. Cheyenne Mountain School Dist. No. 12, 844 P.2d 1235 (Colo.App.1992).

In addition, an employer is required to pay accrued vacation to an employee upon separation from employment if the company policy or contract requires it. .  See Thompson v. Cheyenne Mountain School Dist. No. 12, 844 P.2d 1235 (Colo.App.1992).

Also, the Colorado Supreme Court has declined to determine whether an employer if liable to pay employees for accrued vacation upon separation from employment when the policy or contract is silent on the issue. See Cheyenne Mountain School District #12 v. Thompson, 861 P.2d 711 (Colo. Sup. Ct. 1993).

In Colorado, an employer may cap the amount of leave an employee may accrue over time. A employer in Colorado can also implement a “use-it-or-lose-it” policy requiring employees to use their leave by a set date or lose it.

In the beginning of your question, you stated your employer grants PTO time off and does not apply a percentage to designate PTO as vacation days or sick days, that is a normal strategy for applying PTO time off.

This entry was posted on Friday, March 15th, 2013 at 7:10 pm and is filed under
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