Is accrued PTO treated as a lump sum payment or actual hours worked?

UPDATED: May 21, 2012

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Is accrued PTO treated as a lump sum payment or actual hours worked?

I submitted my 2 week notice, and my last day of work in the office will be May on the 25th. I have 4 days of accrued PTO; with a paid company holiday on the 28th, that would give me enough PTO to cover the whole next week, which ends on the 1st of next month. Will I still technically be an employee on the 1st, and thus entitled to the employer-sponsored health insurance for the month or would my employment officially end on the 25th, with a lump-sum payment for the 4 days of PTO?

Asked on May 21, 2012 under Employment Labor Law, Iowa


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

There is no general rule, since employers are not required to provide PTO in the first place, and there is no law in Iowa requiring payout of accrued PTO on resignation. It is up to the employer's policies--i.e. the employer is free to establish for itself whether, under what conditions, or how PTO is paid when employment ends. It would be legal to pay it as a lump sum; it would also be legal to instead keep you on the payroll for the extra days. Your company can treat this however they have decided--if they have a policy in place, they should follow it; if there is no policy, they can decide in this specific case what to do; and what you have agreed with them (if anything) in regards to this will also be a factor.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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