+ Reply to Thread
Results 1 to 5 of 5
  1. #1
    Join Date
    May 2009

    PTO Payout at end of employement (California)

    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

    - 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

    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.


    Thanks all!

  2. #2
    Join Date
    Feb 2006
    Philadelphia, PA
    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.

  3. #3
    Join Date
    Oct 2004
    small town, PA
    ecmst12 is correct in that you cannot lose PTO in California once it has been earned.
    [url=http://www.dir.ca.gov/dlse/FAQ_Vacation.htm]Division of Labor Standards Enforcement (DLSE)[/url]

    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
  4. #4
    Join Date
    May 2009
    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 by paulb0t; 05-13-2009 at 12:16 AM.
  5. #5
    Join Date
    Oct 2004
    small town, PA
    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.

    You have not won the law suit lottery; in fact, you haven't even won the law suit scratch-off.
+ Reply to Thread

Similar Threads

  1. California & Profit Sharing Payout Delay
    By dunyay in forum Fringe Benefits
    Replies: 3
    Last Post: 04-15-2007, 08:54 AM
  2. Personal Injury Payout / California
    By chandlj in forum Tax Law
    Replies: 0
    Last Post: 12-02-2004, 03:52 PM
  3. Employement
    By shawnma in forum Consumer Contracts, Guarantees and Warranties
    Replies: 1
    Last Post: 10-30-2001, 05:13 PM
  4. EOE Employement ?
    By cbirdlady in forum Hiring, Firing & Wrongful Termination
    Replies: 1
    Last Post: 08-28-2000, 12:50 PM
  5. Employement Law
    By hndsnfelw in forum Hiring, Firing & Wrongful Termination
    Replies: 1
    Last Post: 12-28-1999, 05:29 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts

© Since 1995 Advice Company, All Rights Reserved

FreeAdvice® has been providing millions of consumers with outstanding advice, free, since 1995. While not a substitute for personal advice from a licensed professional, it is available AS IS, subject to our Disclaimer and Terms & Conditions Of Use.