What Exactly Is Paid Time Off? And How to Know If You Have It.

Work office.
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One day after BuzzFeed laid off a mass of editorial workers across the company, a public Medium letter signed by employees brought attention to one term of the cuts that had not yet been reported: that BuzzFeed had decided not to pay many of its 200-plus laid-off workers their earned paid time off (PTO), meaning they would not be compensated for all the time off they’d earned while working at the company. Though BuzzFeed CEO Jonah Peretti ultimately relented to internal and external pressure and agreed to change the terms of its separation agreement, the letter highlighted how a boss or a state law — in this case, both — can stand between an employee and money they say they earned.

There is no federal statute governing PTO, meaning that the policies look different in every workplace, and in every state. In fact, many employees don’t even have PTO. Below, here’s everything you need to know about how PTO works, which states have laws around it, and what happens to your accrued hours if you get laid off.

How does paid time off work?

If you work at company that has a PTO policy, you’ll start off with a bank of hours that you can use for sick days, doctors’ appointments, vacation, personal days, etc. Regardless of how you use the time, you still get paid on those days off. In short, instead of separating allotted sick days from vacation days, PTO lumps it all together, which gives the employee the freedom and flexibility to use their banked hours as they see fit. What’s often not included in PTO is any prolonged absence, such as maternity leave or disability leave.

The longer you work for your employer, the more hours you will accrue. While most employees get these hours bi-monthly or every two weeks, some accrual rates are determined by the precise number of hours you work. As Human Resources expert and speaker Laurie Ruettimann tells the Cut, “PTO is part of your total compensation package as an employee, and each day theoretically represents a dollar amount.”

Again, all PTO policies are different. Some companies allow you to roll over all your accrued PTO hours into the new year, while others place limits on this; furthermore, many employers put caps on the number of PTO hours you can accrue — but, again, this varies from company to company. Furthermore, temporary and contract employees are not eligible for PTO.

“The best PTO plans are those where you earn and accrue days off throughout the year in a bank,” Ruettimann says. “Those days off have real value, and, if you get laid off, you’ll get a payout for what you’ve accrued and earned with your final check.”

How do I know if I have it?

“If you have PTO policy, it’s usually written down somewhere for legal purposes,” Ruettimann explains. The easiest way to figure out if your company has a policy is to check your employee handbook or offer letter, which should outline your accrual rate, your maximum balance, and your company’s carry-over policy. If you have unlimited vacation or your company differentiates vacation days from sick days, you don’t have PTO.

If you know you have a PTO policy but don’t know how many hours you’ve accrued, there are a number of online PTO calculators that can help you calculate your amount, as long as you know your start date, rate, and start balance.

And states have different laws around it?

About 50 percent of states have laws that require employers to pay out a terminated employee’s unused vacation time, if a company policy exists. (Under employment law, states treat PTO days the same as vacation days.) Of these states, seven have laws that say employers must pay unused vacation days in all cases: California, Illinois, Montana, Louisiana, Massachusetts, Nebraska, and Rhode Island. One unusual example is North Dakota, which has a law similar to the aforementioned group, but allows employers to withhold payment of accrued PTO if the employee quits after less than a year or gives fewer than five days’ notice.

The issue at BuzzFeed came down to state law. Per the Medium letter, the company originally planned to “only pay out PTO to employees in California, where the law requires it,” which left behind employees who worked in states without such progressive laws.

To find our your state policy, the most accurate source is the state’s labor department website, though there are also a number of concise charts online that outline laws for all 50 states.

So what happens to my accrued days if I get laid off or fired?

Again, this depends both on the state in which you live and on your employer. If you live in one of the states that requires employers pay out accrued hours, you are entitled to that money. So say you work in California, where employers are obligated to pay out accrued vacation time as if it were wages: If your company refuses to pay out this time, Jonathan LaCour, a lawyer at Employees First Labor Law, tells the Cut that an employee could file a “failure to pay wages claim.”

If you don’t live in a state like California, though, your employer may still cash out earned hours if it’s company policy. And if you have neither a progressive state law nor PTO policy, there is one other potential way to push management to pay employees, as BuzzFeed workers showed: collective action.

“After meeting with the BuzzFeed News Staff Council on Monday afternoon, Jonah Peretti announced in a company-wide email that BuzzFeed will pay out earned and unused PTO to our US colleagues who were laid off this week, regardless of which state they live in,” the updated letter reads. “Thank you, thank you, thank you to the nearly 600 BuzzFeed employees who signed this letter and stood in solidarity.”

How Exactly Does Paid Time Off Work?