Is an employer obligated to pay earned PTO time to employee’s once terminated?

I provided my employer with a two week notice and was notified that they would not be paying the paid time off hours earned upon leaving. Is this legal? The employer handbook states that upon termination the employee will be paid any earned vacation time. The employer stated to me that since the terminology had changed from

Asked on May 11, 2017 under Employment Labor Law, Virginia


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You most likely do have a case if the employee handbook is clear that vacation time is always paid in situations like your own. If so, the employer adopted a firm policy, pursuant to which you worked, which obligates them to pay the vacation portion of your time (see below) out.
As to the change from "vacation" to "PTO"--courts interpret obligations reasonably. A change only in name will not affect legal obligations: e.g. if the employer changed the term "vacation" to "employee fun time," that would have no effect on the obligation to pay *vacation* out. But in interpreting such obligations reasonably, courts look to what the obligation really was: here, it was to pay out unused vacation time--not unused sick leave, for example. A court, if you were to sue, would most likely try to determine what portion of your PTO was effectively "vacation" (and not, say, sick time) and pay you out for that. They would not pay you out for any portion of the unused time which was likely the equivalent of sick days.

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