Ask our experts: PTO

Yes, you can (so long as you don’t illegally discriminate).

In general, an employer may offer different amounts of PTO to different groups of employees – so long as the different offers are not based on illegal discriminatory factors under any applicable law, like race, age or gender. An employer can lawfully discriminate between, for example, its full-time and part-time employees, or its exempt and non-exempt employees. But it can’t lawfully offer a more generous PTO policy to younger versus older employees.

PTO policies can get confusing when state or local laws come into play. Employers have to keep in mind that any PTO policy must comply with mandatory time off requirements in all relevant jurisdictions; and some jurisdictions may include requirements about which categories of employees must be granted time off for certain reasons. Every employer should be familiar with the state and local requirements in every jurisdiction relevant to its business.

Everyone hates this answer, let’s face it – but it depends!

The answer here depends on the requirements of the specific state law at issue, including whether and how a particular state’s law permits an employer to utilize an existing paid leave policy to meet its accrual requirements.

For example, California’s Healthy Workplaces, Healthy Families Act (HWHFA) requires private employers to provide paid sick and safe time to eligible employees. The California Labor Commissioner’s FAQs state that employers that offer unlimited paid time off plans and do not track how much time employees take off may meet the HWHFA’s requirement to track accrued and used paid sick leave by indicating on the itemized pay stub or separate written statement provided with the payment of wages that the paid sick leave is “unlimited.”

In Connecticut, it’s up to you as the employer – but you have to follow your own policy!

State (and local) laws on PTO pay out at separation generally fall into four categories:
1. An employer must pay out unused, accrued time;
2. An employer does not have to pay it out;
3. Payout is governed by the employer’s policy; or
4. State law is silent on the issue.

Again, it is critical for every employer, especially those operating in multiple jurisdictions, to know which laws apply to it before implementing a PTO policy.
In Connecticut, the law provides only that an employer must follow its own policy regarding payment of unused accrued fringe benefits upon termination (e.g., paid vacations, holidays, sick days). Specifically, the statute says that if an employer’s policy states that it will pay employees accrued fringe benefits upon termination, employees “shall be compensated for such accrued fringe benefits…in the form of wages in accordance with such…policy….”

A Connecticut employer that does not wish to pay out PTO upon an employee’s separation should, therefore, clearly state that in a written PTO policy. This is sound advice for all employers, though – if you don’t want to pay it, say it! Employers need to spell it all out in a clearly written policy that answers every question, including what happens when an employee leaves.

But such a policy is important in Connecticut for another reason: Connecticut law specifically requires employers to make available to employees at the time of hire, either in writing or through a posted notice, any employment practices and policies regarding wages, vacation pay, sick leave, health and welfare benefits and comparable matters.