Paid Time Off Payout Laws By State: Know Your Rights

Time & Labor, Compliance

August 04, 2023

When it comes to time and labor management, one of the most important areas is managing employee leave and paid time off (PTO). In order to properly manage paid time off and other leave laws, you need to know what laws apply to your business. Here is a guide of PTO laws by state for 2023, as well as some federal leave laws to be aware of.

State-by-State PTO Laws

When it comes to managing compliance, employee leave can be one of the toughest areas as every state is different.

Businesses must manage compliance with federal leave laws, such as the Family and Medical Leave Act (FMLA), as well as any local or state-specific paid time off laws.

Federal PTO Laws - FMLA

While there are no federal laws requiring paid time off, the Family and Medical Leave Act (FMLA) is a federal law requiring job-protected, unpaid leave for qualifying family or medical reasons.

FMLA applies to all employers in the United States with 50 or more employees. However, there are certain requirements in order for an employee to be eligible for FMLA leave and benefits.

Which States Have Their Own PTO Laws?

While not all states have PTO laws, here is everything you need to know about PTO in your state:

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Paid Time Off in Alabama

Alabama does not have a state PTO law, however, any employers who choose to offer PTO must adhere to their policies and notify employees in advance if they decide to discontinue or alter an existing policy.

Paid Time Off in Alaska

Alaska does not have a state PTO law, however, any employers who choose to offer PTO must adhere to their policies, including any agreements to payout PTO upon termination.

Paid Time Off in Arizona

Arizona does not have a state PTO law but does have paid sick leave. Employers should ensure they understand Arizona Paid Sick Leave well.

Paid Time Off in Arkansas

Arkansas does not have a state PTO law, however, any employers who choose to offer PTO must adhere to their policies, including any agreements to payout PTO upon termination.

Paid Time Off in California

While California does not have a law requiring paid or unpaid vacation time, any earned vacation time in the state is considered earned wages.

Important to note is that employers must payout any unused vacation time upon termination of employment unless a prior agreement has been made by both the employer and employee. Additionally, employers are prohibited from implementing use-it-or-lose-it policies but may implement a reasonable accrual cap for PTO.

Paid Time Off in Colorado

While Colorado does not have a law requiring paid or unpaid vacation time, any earned vacation time in the state is considered earned wages. Important to note is that sick time is not considered earned wages.

Employers in Colorado that do offer PTO must payout all accrued PTO upon termination or otherwise risk major legal and financial penalties.

Paid Time Off in Connecticut

Connecticut does not have a state PTO law, however, any employers who choose to offer PTO must adhere to their policies or otherwise risk major legal and financial penalties.

Paid Time Off in Delaware

Delaware does not have a state PTO law. Any PTO policy is up to the discretion of the employer. However, any employers who choose to offer PTO must adhere to their policies or otherwise risk major legal and financial penalties.

Important to note, is that Delaware has a specific requirement that if an employer's policy includes a payout of unused accrued PTO upon termination, the payout must be made within 30 days of separation.

Paid Time Off in Florida

Florida does not have a state PTO law.

Paid Time Off in Georgia

Georgia does not have a state PTO law.

Paid Time Off in Hawaii

Hawaii does not have a state PTO law. However, any employers who choose to offer PTO must adhere to their policies or otherwise risk major legal and financial penalties.

Important to note, is that Hawaii has a specific requirement that if an employer's policy includes a payout of unused accrued PTO upon termination, the payout must be made on the employee's final day of employment.

Paid Time Off in Idaho

Idaho does not have a state PTO law.

Paid Time Off in Illinois

Illinois recently passed the Paid Leave for All Workers Act, which will go into effect on January 1st, 2024. The new law will provide employees with up to 40 hours of paid leave during a 12-month period.

Paid Time Off in Indiana

Indiana does not have a state PTO law, nor is vacation time considered wages (rather it is considered deferred compensation). However, any employers who choose to offer PTO must adhere to their policies or otherwise risk major legal and financial penalties.

There are other laws regarding employee leave in Indiana for employers to be aware of as well.

Paid Time Off in Iowa

While Iowa does not have a law requiring paid or unpaid vacation time, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Kansas

Kansas does not have a state PTO law, but employers who implement their own policy must adhere to that policy.

Important to note is that employers are liable to provide the vacation pay established in their policy unless they include one of the following two things in their policy:

Employees will only earn vacation time when passing their anniversary date.
Employees that separate prior to their anniversary dates will not be entitled to compensation.

Paid Time Off in Kentucky

While Kentucky does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Louisiana

While Louisiana does not have a law requiring that employers offer PTO, any employers that do offer PTO must payout employees for any unused PTO upon termination. It is also important that if an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Maine

Maine does not have a specific PTO law, per say, rather it has its own Earned Paid Leave Law, which provides paid leave to eligible employees that can be used for any reason, medical or vacation.

Maine Earned Paid Leave applies to businesses with more than 10 employees in Maine for more than 120 days in any calendar year.

Paid Time Off in Maryland

Maryland does not have any laws that require PTO. However, any employers who choose to offer PTO must adhere to their policies or otherwise risk major legal and financial penalties.

Important to note is that unless an employer has a policy in place that states the forfeiture of pay for accrued, unused PTO to a terminated employee, then the employer must payout the employee for said PTO.

Paid Time Off in Massachusetts

While Massachusetts does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Important to note is that employers in Massachusetts must payout employees upon termination for any unused, accrued PTO.

Paid Time Off in Michigan

While Michigan does not have a law requiring PTO, any earned vacation time in the state is considered a fringe benefit. Employers are required to payout fringe benefits included in their written policy upon separation.

Paid Time Off in Minnesota

While Minnesota does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Mississippi

Mississippi does not have a state PTO law.

Paid Time Off in Missouri

Missouri does not have a state PTO law.

Paid Time Off in Montana

While Montana does not have a law requiring paid or unpaid vacation time, any earned vacation time in the state is considered earned wages.

Important to note is that employers must payout any unused vacation time upon termination of employment if vacation has been promised in writing or verbally. Additionally, employers are prohibited from implementing use-it-or-lose-it policies but may implement a reasonable accrual cap for PTO.

Paid Time Off in Nebraska

While Nebraska does not have a law requiring PTO, any earned vacation time in the state is considered a type of fringe benefit and is considered wages.

Important to note is that employers must payout any unused vacation time upon termination of employment and are prohibited from implementing use-it-or-lose-it policies.

Paid Time Off in Nevada

Nevada does not have a state PTO law.

Paid Time Off in New Hampshire

While New Hampshire does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in New Jersey

New Jersey does not have any laws requiring PTO. It is also important to know that in New Jersey, accrued PTO is seen as a benefit and not as wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in New Mexico

New Mexico does not have any laws requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in New York

New York does not have any laws requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Important to note is that employers may use a "use-it-or-lose-it policy" in New York, but must provide advance notice to employees if they plan to do so.

Paid Time Off in North Carolina

North Carolina does not have any laws requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Important to note is that employers may use a "use-it-or-lose-it policy" in North Carolina, but must post a notice in writing of any policy that enforces such terms.

Paid Time Off in North Dakota

While North Dakota does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Important to note is that employers may use a "use-it-or-lose-it policy" in North Dakota, but must give employees notice of such a policy as well as reasonable time to use any accrued PTO.

Employers must also payout any unused, accrued PTO upon termination. However, private employers may revoke such a payment if:

The employer gave the employee written notice at the time of hiring about this policy
The employee has been employed for less than one year
The employee gave fewer than five days’ notice before the separation

Paid Time Off in Ohio

Ohio does not have any laws requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Oklahoma

While Oklahoma does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Oregon

While Oregon does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Pennsylvania

While Pennsylvania does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Rhode Island

Rhode Island does not have a law requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Important to note is that Rhode Island does require that employers payout any accrued, unused PTO upon termination if the employee has been working for the employer for at least one year.

Paid Time Off in South Carolina

South Carolina does not have a law requiring PTO. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Specifically, South Carolina employers who offer PTO must:

Give notice of the policy to the employee
Abide by the policy
Not discriminate in its administering of the policy

Paid Time Off in South Dakota

South Dakota does not have a state PTO law.

Paid Time Off in Tennessee

Tennessee does not require businesses to offer fringe benefits of any kind. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Texas

Texas does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Utah

Utah does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Specifically in Utah, if an employer plans to not payout accrued, unused PTO upon separation, this must be explicitly included in any PTO policy they have.

Paid Time Off in Vermont

Vermont does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Virginia

Virginia does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Washington

Washington does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in West Virginia

While West Virginia does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Wisconsin

While Wisconsin does not have a law requiring PTO, any earned vacation time in the state is considered earned wages. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.

Paid Time Off in Wyoming

Wyoming does not have a state PTO law. If an employer implements their own PTO policy, it is important that they adhere to their policies or otherwise risk legal and financial trouble.