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Top Employment Lawyer Reply: When I leave my job, do I get paid for unused PTO?

| Aug 15, 2014 | minimum wage violation, overtime time violation, tipped employee violations |

Best Ohio Wage & Hour Attorney Reply: Am I entitled to receive a check for my unused vacation and sick time after I was fired? Can my job change its PTO policy after I have already earned my time off? Can my boss refuse to pay me my accrued PTO after I quit without notice?

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Under Ohio law, “vacation pay is not a gift or gratuity, but rather a deferred payment of an earned benefit and an employer can no more withhold the accrued vacation pay than, for example, it could hold the last pay check the employee earned but not received.” See Condron v. The City of Willoughby Hills, 2007-Ohio-5208 at ¶ 40. Some employers offer generous vacation and sick time benefits as part of an employee’s benefits, pay, and as a method for attracting talented job applicants. Courts treat vacation time in the same light as hours worked by an employee – both are owed to the employee upon termination of employment.

Ohio case law carves out an exception to vacation pay upon termination of employment when an employer institutes a written policy limiting vacation pay. Employers may legally limit the benefits surrounding vacation time including instituting rules as to how vacation is accrued, requiring employees to work a certain amount of time before they are

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provided vacation time. Employers may also provide a forfeiture clause in the employment contract, stating that employees lose vacation pay at the end of employment if they are terminated for just cause or fail to provide sufficient notice upon termination. Employers may even state all vacation pay is forfeited once an employee ends employment for any reason.

Let’s take Ervin v. Oak Ridge Treatment Center as an example. In this case, the Fourth District Court of Appeals of Ohio reverse the trial court and held:

The employee handbook contains provisions setting forth various benefits, including PTO, which the company provides to its employees. Most of these provisions are not relevant to this appeal. Oak Ridge’s policy concerning payment of PTO to employees who resign or are terminated appears in the employee handbook PTO provision entitled “Resignation/ Termination”, which states:

Upon resignation/termination from the company, an employee will not be paid for any unused and accrued time in the PTO account. [Emphasis in original.] …

The plain language of the PTO policy’s “Resignation/Termination” provision unequivocally precludes payment of PTO to employees upon termination of their employment. Hence, based on the PTO policy’s clear terms, an employee could not have a reasonable expectation of being entitled to PTO payment upon termination.

The court below nevertheless concluded that Oak Ridge’s PTO provision precluding payment is against public policy and that Ervin is entitled to payment for the balance in her PTO account at the time her employment with Oak Ridge ended. It did so without giving any reason for this finding.

In Ohio, public policy violations in an employment context may exist when an employer enacts an employment policy that contravenes a clear public policy that is manifested in state or federal constitutions, statues, administrative regulations, or common law. See, Collins v. Rizkana (1995), 73 Ohio St.3d 65, paragraph two of the syllabus; Painter v. Graley (1994), 70 Ohio St.3d 377, paragraph three of the syllabus; Greeley v. Miami Valley Maintenance Contr., Inc. (1990), 49 Ohio St.3d 228, paragraph two of the syllabus.

The trial court did not identify and our research has not revealed any state or federal law manifesting a clear policy requiring an employer to give employees PTO or to pay them for any accrued but unused PTO upon termination. Accordingly, when Oak Ridge did give PTO to its employees, it could establish the rules under which employees could receive the PTO. …

Indeed, Ohio courts have enforced company policies that restrict or preclude payment for personal or vacation time upon termination of employment where, as here, the policies are clear and published in an employee handbook. …

The “Resignation/Termination” provision of Oak Ridge’s PTO policy published in its employee handbook does not contravene a clear policy manifested in law. Thus, the provision is enforceable and not void as against public policy. Because the provision clearly states that an employee will not be paid for any accrued, unused time remaining in the employee’s PTO account upon termination of employment, Ervin was not entitled to collect PTO payment after Oak Ridge terminated her employment.

Keeping this in mind, employees should always check their employee handbook and/or employment contract before deciding to leave an employer. Vacation pay rules may require a certain amount of notice before a resigning from employment in order to preserve PTO rights. Forfeiture of vacation pay may also occur if the termination is for cause or automatically if termination occurs for any reason. However, it is important to note that under Ohio employment law, employers who institute a policy limiting vacation pay after an employee has already begun working cannot apply a vacation policy limiting pay retroactively.

Employees who do not have a written policy and are entitled to vacation pay upon termination should promptly request vacation pay if it is not provided automatically by the employer.

If you believe that your employer is not paying you all of your wages for all of your lawfully earned overtime compensation at a rate of one and half times your normal wages as requires under the Federal Fair Labor Standards Act or Ohio Minimum Fair Wage Standards laws or you are an nonexempt employee that has been misclassified as exempt or independent contractor, contact the attorneys at The Spitz Law Firm today for a free and confidential initial consultation. The wage and hour lawyers at The Spitz Law Firm will provide you with the best options for your overtime pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.

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