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Aug18

Accrued PTO while on STD

Is PTO allowed to generate while an employee is on short term disability?

There is no federal law that regulates the accruals of paid time off (PTO) benefits for private employers. Some states have adopted such laws, mostly for vacation time. Of these states most simply require employers to adhere to their own established policies and practices. Further, of the states that have regulations concerning the administration of vacation benefits some consider vacation time to be earned as labor is performed. Thus, when no work is being performed such as while on employee is on short term disability (STD) leave, then PTO benefits need not continue to accrue. Still, it’s best to know if any applicable law exists in your state.

Absent state law or employment contract stating otherwise, employers are free to adopt PTO policies at their discretion. Such policies should include how and when PTO is accrued.

It’s fairly common for employers to restrict employees on unpaid leaves of absence, such as STD/LTD leave, from accruing PTO. Usually, employees on paid leave, such as vacation/sick, continue to accrue PTO. It’s really up to the employer to adopt a policy/practice on the matter and ensure it’s consistently enforced.

It’s worth mentioning that employees who take leave under the federal Family & Medical Leave Act (FMLA) are entitled to the same benefits as other employees on temporary leaves of absence. So, if you allow PTO to accrue while an employee is on vacation, then the same must be allowed for an employee on FMLA leave.

This entry was posted on Thursday, August 18th, 2016 at 12:34 pm and is filed under
Benefits.
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