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Posted in Workers Compensation on January 25, 2024
Paid time off (PTO) is great, but what happens if you quit your job or get terminated? Do you lose the PTO, or can you get cash out?
While it is great to get any money for your unused PTO after termination, there is no guarantee written into Arizona law that requires employers to pay this money. After a termination, individuals may be left walking away without their unused PTO cash. However, some companies may have a policy that spells out what happens to unused PTO when a person’s employment ends, and the company would most likely have to follow that written policy.
States are left to decide whether or not employers are required to pay out previously unpaid paid time off after a person leaves their employment, whether through termination or voluntary separation.
Arizona law does not require PTO to be paid out after a person leaves employment. If an employee is terminated from their job, the employer does not have to pay out any unused PTO.
Even though there is no state-level law requiring employers to pay out unpaid PTO, the state will hold employers accountable for failing to uphold any company policies relating to paychecks and payments. This includes payment of PTO.
If an employer guarantees to pay out accrued vacation time or PTO upon termination of employment, then they will have to do so. Typically, these types of guarantees come in the form of the employee handbook, company manual, an applicable collective bargaining agreement, or an employment agreement. Employers can also make verbal guarantees of specific benefits, including handling PTO after employment separation. Additionally, past practices of the employer can be used as guidance for current and future employee expectations.
In the event an employee does not receive their accrued PTO upon termination, and if the employer had a policy in place guaranteeing the payment of the PTO, the employee might be able to file a complaint against the company.
If you have been terminated from employment and have not received the correct final payments, we encourage you to reach out to an attorney as soon as possible. An Phoenix workers’ compensation attorney can help examine the facts of your claim and help determine the best route moving forward for your situation.
The reality is that employers often count on workers not understanding their rights. In fact, an employer could even point to state law to let the employee know that they have no guarantee of PTO payment after termination, but if the internal company policies specify payment of accrued vacation time, they should pay it.
When you have an employee rights lawyer helping you, you will have an advocate ready to communicate with all parties involved in an effort to reach an amicable solution. This includes complete payment of any accrued PTO, final paychecks, and any other benefits guaranteed payment through company policy.
They can assist with filing a claim with the ICA to receive unpaid PTO, but in order to file a claim with the ICA, the claim must be less than $5,000, and only unpaid wages from the past year will be considered. An attorney can help you sort through other routes of compensation recovery if a claim with the ICA is not possible.