Saturday, 04 May 2013 06:11

Employees are entitled to be paid for earned, but unused PTO upon separation

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Today the Nebraska Supreme Court in Fisher v. Payflex found that employees are entitled to earned and unused Paid Time Off (“PTO”) when they leave employment.  The court found PTO hours were indistinguishable from earned vacation time under Nebraska law.  Present Nebraska law requires that employees be paid for earned (or accrued) but unused vacation leave.  Payflex’s employment policy provided that employees accrued PTO during each pay period of continuous employment and that an employee could carryover no more than 200 hours of PTO. PTO could be used for vacation, sick time, and personal concerns.  The policy provided that Payflex would not pay their employees for unused PTO hours.  The policy set forth the number of hours an employee would earn of PTO per pay period per year.  The court found that because an employee could use all of the PTO time as vacation time PTO was the equivalent of vacation time.

If your employment policy provides that your employees earn or accrue PTO time just by continuing to be employed you will want to make sure you are paying your employees for their earned but unused PTO time upon separation.  Contact us if you have questions or would like to speak to an attorney experienced in employment law.

Read 39675 times Last modified on Saturday, 04 May 2013 06:14
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