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PTO Payout at end of employement (California)

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paulb0t

Junior Member
California specific.

Hi all,

I'm in the process of wrapping up my position of 4 years with a San
Francisco company (I resigned to take another position). There are
some significant issues around my PTO (Paid Time Off) payout, and I'm
wondering if it's legal/appropriate, so was hoping to check with an
expert. If anyone has a moment to review the information, I'd greatly appreciate any and all help.

I'm providing a snap-shot for your perusal to expedite this process. My last day (verbally given) is to be Friday, May 15th.

Here's the snapshot:

- I have 400 hours PTO (paid time off) accumulated, which is the cap.

- On January 1st, I was furloughed 10% (putting my FTE
hours/compensation at 90%)

- Later that month, I was given additional recurring tasks, which
effectively increased my workload (I was working an average of 55 to
60 hours per week, with no additional compensation)

- As part of the furlough, I could supplement the 10% lost income
w/ PTO payout (I'd continue to accrue PTO at the full rate, and
the 10% would be made up in order to reduce liability on the books).
I elected to utilize this benefit.

- I signed a simple payroll change form document stating that, as part
of taking 10% furlough reimbursement, my PTO cap would be set at 25
days (200 hours). There was a verbal communication that the new cap
would take effect July 1st, 2009, and all PTO over 25 days would be
lost if not taken by then ("Use or Lose", though never stated as such.) I'm still at my cap (400 hours, as stated in their books).

- I'm leaving effective May 15th, and they're stipulating that they're
only liable for 200 hours of PTO payout, because of the furlough
payout.

- My understanding is it's an earned benefit, there's was nothing in
the signed document about PTO cycling down to 200 hours before July
1st, and I should be legally entitled to the full payout.

- Here is a text copy of the simple payroll change form I signed:

###

Payroll Change Form
Employee Name: XXX
Date 1/16/09

Type of Change X Salary rate reduction & Furlough

Effective Date 1/1/09

Old Salary Rate: 1FTE $XX,XXX.XX
New Salary Rate: 1FTE $XX,XXX.XX a 2% reduction

monthly gross reduction
Old FTE: 1.00: X ,XXX.XX
New FTE: 0.90: X ,XXX.XX

Dec '08 PTO balance: 50.00 days
maximum PTO swap: 25.00 days
new PTO cap would be: 25.00 days

monthly gross reduction
If you swap max PTO for FTE: X ,XXX.XX

Comments
Return this form with an indication of
whether you prefer an unpaid furlough or
using PTO and getting paid. You can use
fewer than your maximum PTO swap days.

Furlough preference:
( ) I would prefer a reduction in FTE (unpaid furlough).
( ) I would prefer to swap my maximum PTO days.
( ) I would prefer to use days.
Signed:

###

Thanks all!
 


ecmst12

Senior Member
It's my understanding that ANY "use or lose" PTO policy is illegal in California. PTO is the same as wages and any time you would "lose" hours of PTO, they must be paid out to you. They can't just go away once you've earned them.
 

paulb0t

Junior Member
Thanks for the replies - this was my assumption as well.

My concern is with the shifting cap - specifically around them reducing it by half - can this be applied to PTO already accrued? This is where I'm unclear on the law.
 
Last edited:

pattytx

Senior Member
A cap can be implemented. However, the employer must allow reasonable time (generally 6 months) for the employees to "work down" the balance to the lower "cap", and pay out any vacation not drawn down. Therefore, although I am not in the mind of the the DLSE, I would guess that, since you have resigned before the 6 month period was up, you would have to be paid whatever balance is in the account. Again, you cannot lose vacation already accrued.
 

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