• Basics of PTO payout laws in the US,
  • PTO payout laws by state, and
  • Frequently asked questions about PTO payout laws.
PTO Payout Laws by State — Guide for 2024
  • Federal law doesn’t require unused PTO payouts from employers.
  • In most states, unused PTO payouts are regulated by individual employment agreements and company policies. 
  • If an employment agreement promises unused PTO payouts, almost all states have specific penalties for employers that withhold payment. 
  • Most states allow employers to implement use-it-or-lose-it policies, establishing a deadline for using accrued PTO.
  • In practice, most use-it-or-lose-it policies prevent employees from carrying over vacation leave from one year to the next.

PTO payout laws in the US — the basics

  • What is PTO,
  • What is PTO payout,
  • What is vacation pay and how does it work, and
  • What is a use-it-or-lose-it policy.

What is PTO?

  1. Holiday leave — time off for holidays like Christmas Day, Independence Day, Thanksgiving, etc., 
  2. Sick leave — time off to recover from an injury or illness, 
  3. Bereavement leave — time to come to terms with loss, make funeral arrangements, and similar, in case of the death of a family member, close relative, etc.,
  4. Vacation leave — to take a break from work to rest, spend time with family and friends, travel, etc.,
  5. Family leave — to take care of a seriously ill family member or bond with a newborn or adopted child,
  6. Military leave — to perform duties (active or inactive) in the National Guard or as a reserve of the Armed Forces, and
  7. Jury leave — to take time off to report for jury duty. 

What is vacation pay and how does it work?

  • Your length of employment, 
  • Whether you work in the public or private sectors, and 
  • Your employer.

What is PTO payout?

  • How much PTO an employer offers, 
  • How an employee can accrue PTO, and 
  • How an employee can use it. 

What is a use-it-or-lose-it policy?

PTO payout laws by state

StateIs vacation pay required by state law?Are use-it-or-lose-it policies legal?Are unused PTO payouts required by state law?What are potential employer penalties for not paying out unused PTO?   
AlabamaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.Specific penalties aren’t outlined in Alabama state law, but the court may award damages after civil litigation.
AlaskaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay the employee’s regular wage for each day of the delay, up to 90 working days.  
ArizonaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay treble damages (3 times the amount of owed wages), plus interest on the owed amount.
ArkansasNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay double the amount of owed wages.
CaliforniaNo, vacation pay depends on the employment agreement and company policies.No, use-it-or-lose-it policies are illegal.Yes, PTO payouts are required by state law. An employer must pay employee’s regular wage for each day of the delay, up to 30 working days plus interest. 
Colorado No, vacation pay depends on the employment agreement and company policies.No, use-it-or-lose-it policies are illegal.Yes, PTO payouts are required by state law. An employer must pay twice the amount of owed wages or $1,000 (whichever is greater) for accidental failure to pay. Willful failure increases the penalty by 50%. 
ConnecticutNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay double the amount of owed wages plus legal fees.
DelawareNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay 10% of unpaid wages for each day of the delay, except Sundays and legal holidays, plus a civil penalty of between $1,000 and $5,000.
FloridaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay legal fees after a breach of contract dispute.
GeorgiaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer is liable for a misdemeanor charge, potentially resulting in jail time and/or a $1,000 fine. 
District of ColumbiaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay 10% of the owed amount per each working day the payment is delayed up to 3 times the owed amount.
HawaiiNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay the total amount of owed wages in damages with a yearly interest of 6% and a fine of between $2,000 and $10,000.  
IdahoNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a $750 fine, or up to 3 times the owed amount if a wage claim is won at the District Court. 
IllinoisYes, state law mandates at least 40 hours of paid leave in a 12-month period to every employee.No, use-it-or-lose-it policies are illegal.No, PTO payouts are required only if promised in employment agreements and company policies. An employer must pay 5% of the owed amount for each month of the delay and an administrative fee of between $250 and $1,000. Employers who fail to comply with an order to pay from the state’s Department of Labor also pay a penalty of 20% of the unpaid wages and a penalty of 1% of the unpaid wages to the employee for each day the payment is delayed.
IndianaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by law but only if the requirements from the employment agreement have been met. An employer must pay up to two times the owed amount, if payment has been withheld willfully. 
IowaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay 5% of the owed amount for each day of the delay. 
KansasNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.If the employer has withheld payment willfully, they must pay an additional 1% of the owed amount for each day of the delay (from the 9th day, excluding Sundays and holidays), up to 100% of the owed. 
KentuckyNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a fine ranging from $100 and $1,000. 
LouisianaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by state law. An employer must pay up to 90 days of wages at the employee’s daily rate or full wages at the employee’s rate for the period of the delay, whichever is less.  
MaineYes, employers with more than 10 employees must provide 1 hour of paid leave for every 40 hours worked, up to 40 hours per year. Use-it-or-lose-it policies are allowed for separate vacation PTO if outlined in employment agreements or company policies but not for the 40 hours of state-mandated PTO.Yes, PTO payouts are required by law for employers with more than 10 employees (excluding public employees). An employer must pay a reasonable interest rate on the owed amount, attorney fees and 2 times the unpaid wages in damages.
Maryland No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay up to 3 times the owed amount, plus attorney’s fees. 
MassachusettsNo, vacation pay depends on the employment agreement and company policies.Yes, if outlined in employment agreements or company policies, and if employees have a reasonable opportunity to use PTO within the time limit. Yes, PTO payouts are required by law unless the employee was terminated due to their fault or delinquency. An employer must pay treble damages plus legal fees. 
Michigan No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay damages up to twice the owed amount, legal fees, and a $300 civil penalty.  
Minnesota No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay an amount equal to the employee’s average daily earnings at their regular pay rate for each day of the delay, up to 15 days. 
MississippiNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay potential damages awarded by the court in a breach of contract claim.
Missouri No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay interest on the owed amount, plus legal fees. 
MontanaNo, vacation pay depends on the employment agreement and company policies.No, use-it-or-lose-it policies are illegal.Yes, PTO payouts are required by state law. An employer must pay 110% of the owed amount. 
NebraskaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by state law. An employer must pay two times the amount of unpaid wages, if the payment was withheld willfully.  
NevadaYes, employers that have been in operation for more than 2 years and have 50 or more employees must provide 0.01923 hours of paid leave to full-time employees for each hour worked, except for temporary, seasonal, or on-call workers.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay an administrative penalty of up to $5,000 and interest on the owed amount. 
New HampshireNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay 10% of the owed amount for each day of the delay, except Sundays and holidays, up to 100% of owed wages. 
New JerseyNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a fine ranging from $500 to $1,000 for the first violation, from $1,000 to $2,000 for subsequent violations, as well as damages up to 200% of the unpaid amount and legal fees. 
New MexicoNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer is liable for a misdemeanor charge, plus an additional 60 days of wages. 
New YorkNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by law unless employment agreements or company policies state otherwise. An employer may be charged with an offense classified as larceny and treated as either a misdemeanor (up to $1,000 owed) or a felony (over $1,000 owed). 
North CarolinaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by law unless employment agreements or company policies state otherwise. An employer must pay damages of up to 100% of the owed amount, interest on the owed amount, and legal fees. 
North DakotaNo, vacation pay depends on the employment agreement and company policies.Yes, if outlined in employment agreements or company policies, and if employees have a reasonable amount of time to use this PTO. Yes, PTO payouts are required by law except in cases of voluntary separation, where an employee has worked for less than 1 year or provided fewer than 5 days of notice. Employers also don’t have to pay out awarded but not accrued PTO. An employer must pay up to 30 additional days of wages, depending on the length of the delay, plus interest on the owed amount. 
Ohio Yes, vacation pay is required by law for public sector employees. Vacation pay in the private sector depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by law for public sector employees. In the private sector, PTO payouts depend on the employment agreement and company policies. An employer must pay damages equal to 6% of unpaid wages or $200, whichever is greater.
OklahomaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay damages equal to 2% for each day the payment is overdue, up to 100% of the owed amount. Misdemeanor charges resulting in 6 months of jail time, a $500 fine, or both.
OregonNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a civil penalty of $1,000, plus wages at the employee’s regular rate for up to 30 days, depending on the length of the delay. 
Pennsylvania No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.30 days after the scheduled payday, the penalty includes 25% of the unpaid amount or $500, whichever is greater. Employers may also be liable for legal fees and face a misdemeanor charge. If the employer does not explain their failure to pay within 10 days after receiving a claim, they are also liable for 10% of the unpaid wages.
Rhode Island No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.Yes, PTO payouts are required by law after one year of employment.For missing wages up to $1,500, employers face misdemeanor charges that may result in jail time and a minimum fine of $400. For missing wages over $1,500, they may face felony charges with a fine of up to $5,000 and jail time. 
South CarolinaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a civil penalty of a maximum of $100 and up to 3 times the amount of owed wages, plus legal fees.
TennesseeNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer may face a misdemeanor charge with a fine of up to $500 and a civil penalty between $500 and $1,000.
TexasNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay an administrative penalty of up to $1,000. For intentional nonpayment, an employer may be charged with a third-degree felony, potentially resulting in a fine of up to $10,000 and jail time. 
UtahNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay wages for up to 60 days, depending on the length of the delay. Also, a penalty of 5% of unpaid wages for each day of the delay, up to 20 days. 
Vermont No, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a civil penalty of up to $100. For intentional non-payment, employers may also face a civil penalty of up to $5,000.
VirginiaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay a civil penalty of up to $1,000. For intentional non-payment of wages up to $10,000, employers may face a misdemeanor charge, or a felony charge for amounts greater than $10,000. Employers may also be liable for 100% of the unpaid wages in damages and a yearly interest of 8%. 
WashingtonNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay up to 2 times the amount of unpaid wages in damages, plus 1% per month in interest and attorney’s fees.
West VirginiaNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay twice the amount of unpaid wages in damages and legal fees. 
WisconsinNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer must pay up to $500 in fines, potential jail time, and up to 100% of the unpaid amount in damages. 
WyomingNo, vacation pay depends on the employment agreement and company policies.Use-it-or-lose-it policies are allowed if outlined in employment agreements or company policies.No, PTO payouts are required only if promised in employment agreements and company policies.An employer may face a misdemeanor charge and up to $200 for each day of the offense. Also, employers may be liable for up to 100% of the unpaid amount in damages. 

FAQs about PTO payout laws by state

What happens to your PTO when you leave a job?

In what states is PTO payout required?

  • California,
  • Colorado,
  • Illinois,
  • Indiana,
  • Louisiana,
  • Maine,
  • Massachusetts, 
  • Nebraska,
  • North Dakota, and
  • Rhode Island.

Which states allow companies to decide on PTO payout?  

  • Alaska,
  • Arizona,
  • Arkansas,
  • Connecticut,
  • Delaware,
  • Florida, 
  • Georgia,
  • District of Columbia,
  • Hawaii,
  • Idaho,
  • Iowa,
  • Kansas,
  • Kentucky,
  • Maryland,
  • Michigan,
  • Minnesota,
  • Missouri,
  • Mississippi,
  • Montana,
  • Nevada,
  • New Hampshire,
  • New Jersey,
  • New Mexico,
  • New York,
  • North Carolina,
  • Ohio,
  • Oklahoma,
  • Oregon,
  • Pennsylvania,
  • South Carolina,
  • Tennessee,
  • Texas,
  • Utah,
  • Vermont,
  • Virginia,
  • Washington,
  • West Virginia,
  • Wisconsin, and
  • Wyoming.

Which US states have no PTO payout regulations?

  • Alabama,
  • Florida,
  • Georgia,
  • Mississippi, and
  • South Dakota.

Which states prohibit a use-it-or-lose-it paid time off policy?

  • California,
  • Colorado,
  • Louisiana,
  • Maine,
  • Massachusetts,
  • Montana, and
  • Nebraska.

Is PTO required by law?

How are payouts for unused vacation days calculated?

  • Determine the total PTO hours the employee has accrued, 
  • Calculate how much payout they’ve earned before tax deductions, and 
  • Withhold taxes. 

Do companies in New York pay unused vacation time?

Do I get paid for unused sick days after I quit?

  • Whether the state you work in has paid sick time laws requiring employers to pay for unused sick days upon termination of employment,
  • Whether your employer has a PTO policy that includes paid sick leave, and if they have it, whether that policy clearly states what happens to your accrued sick leave upon termination, and
  • Whether your employer is required by a collective bargaining agreement or some other legally binding agreement to pay for accrued sick time when an employee leaves their employment.

Accrued PTO payout conclusion and disclaimer

  • Your state has a law requiring your employer to pay for unused PTO upon termination, and
  • Your employer has a PTO policy that clearly states your right to a PTO payout.
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