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

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 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.


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