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A paid time-off policy is a combination of days off that an employee can take while still getting paid. Each state has its own restrictions and requirements for PTO policies. A PTO policy should include paid and unpaid leave options, accrual and rollover details, PTO request procedures, and consequences for violation.
Employers in Massachusetts are not required to provide vacation time, but when they do, the cash value of accrued but unused vacation time must be paid out upon job separation. When an employee leaves work voluntarily, the cash value of his or her vacation time must be paid out in the next regular pay cycle.
In Massachusetts, PTO is considered wages and is required to be paid out upon termination. You are required to pay out the entire accrued, unused balance, whether termination was voluntary or involuntary.
An employer may substitute an existing plan so long as employees: 1) accrue at the rate of at least one hour of PTO for every 30 hours worked; 2) may use up to 40 hours per year of PTO; 3) are paid at least the amount that would be required for earned sick time; 4) can use PTO for the same purposes as earned sick time;
Employer's Carryover Obligation The employee is provided earned sick time in a lump sum allocation of at least 40 hours at the beginning of each benefit year. The employer is not obligated to allow an employee to carry over unused earned sick time into the next year.
If an employee has unused accrued PTO when they quit, are fired, or otherwise separate from the company, they may be entitled to be paid for that time. Around half of the 50 states have statutes that require companies to pay out employees' unused PTO when the employment relationship ends.
If you have a policy, employment contract or a practice of doing so, you're required to pay accrued PTO to every employee who leaves the company. That means, you can't arbitrarily pay banked PTO to salaried employees and not to hourly employees; the practice and policy must equally apply to all employees.
Employers in Massachusetts are not required to provide vacation time, but when they do, the cash value of accrued but unused vacation time must be paid out upon job separation. When an employee leaves work voluntarily, the cash value of his or her vacation time must be paid out in the next regular pay cycle.