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Arizona Law regarding PTO upon Termination

Our company is thinking of starting a PTO program but we are not sure what our liability would be when it comes to a termination of employment. Would we have to pay out the accrued PTO for an employee that has been fired or even just quits? We are a small company of only 12 employees.

There is no law in Arizona that requires employers to provide employees with paid time off (PTO). Nor is there any law in Arizona that requires employers to payout PTO upon separation of employment, regardless of whether the employee resigns or is terminated.

Keep in mind, if an employer chooses to provide PTO and promises, either via a written company policy or established company practice, to payout unused PTO upon separation of employment, it must abide by the terms of its policies or practices.

Thus, it’s advisable to adopt an easily understood PTO policy that clearly states whether unused time will be paid out upon separation of employment.

This entry was posted on Saturday, July 25th, 2015 at 6:01 pm and is filed under
Benefits, Labor Laws.
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