GLGA Member Question – Paying Out Unused PTO

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Do you provide reimbursement of employees’ unused PTO benefits if they are terminated or if they resign? We have always reimbursed in either situation; however, I recently came across another company’s handbook where they don’t pay-out in either case. It is a little uneasy to pay someone PTO after termination.

Summary: 35 responses. Most pay earned/accrued PTO. For companies that do not use a PTO system, you typically pay vacation days but not sick days. If an employee resigns, sometimes it depends on whether they provide advance notice.

We pay out any unused PTO. The employee earned it so why wouldn’t you pay it to them for any reason… It is just a respect to them as a person.

We reimburse terminated employees with any remaining unused vacation hours. We don’t offer “PTO” time, but we do offer our employees sick time – paid AND unpaid. Upon termination, we do not reimburse for unused sick time.

We pay out all accrued PTO when employees are terminated or resign with full carry over. We are contemplating doing buyouts on anniversary dates.

It depends on how your policy is written and how employees are “earning” vacation, the operative word being earnings which are always payable to an employee when they separate employment.

We do not pay out any unused PTO time upon termination. We also do not require an employee to pay us back for PTO time that they have used.

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