Expert: Shirley McAllister, CPP, PHR - 10/28/2008

Question
We are looking into changing our Vacation policy to a PTO policy.  At the end of the year we are going to cap the PTO and pay any hours over the cap at 1/2 the employees hourly rate.  I know that we can't do this in the State of California, but I wanted to know about the rest of our States.  Do you know, or can you point me in the right direction, please?  Montana, Colorado, Illinois, Arkansas, Oklahoma, Texas, Kansas, Missouri, Indiana, West Virginia, Florida, Mississippi, Louisiana  Any help would be appreciated.  Thank you!

Answer
In california you can cap the PTO and you do not have to pay out anything over the cap.
http://www.dir.ca.gov/dlse/FAQ_Vacation.htm

Montana
http://data.opi.mt.gov/bills/mca/2/18/2-18-617.htm

Colorado

VACATION PAY, 5(I)
VACATION NOT REQUIRED
Colorado wage law does not require that vacation time be given. Colorado wage law does not require paid vacation and does not require that an employer establish a vacation policy.
VACATION POLICY
An employer may establish a vacation policy in writing or by custom and practice. Employees must be made aware of the employer’s policy. Employers and employees must follow established policy unless and until that policy is changed. We recommend that employers develop their vacation policy in consultation with legal counsel.
VACATION AS WAGES OR COMPENSATION
Colorado wage law provides that vacation pay, earned in accordance with the terms of any agreement, is classified as wages or compensation. If an employer provides paid vacation for an employee, the employer shall pay upon separation from employment all vacation pay earned and determinable in accordance with the terms of any agreement between the employer and the employee.
GRANTING OF VACATION LEAVE
In general, the granting of vacation leave by an employer for a current employee is made pursuant to the employer’s policy. The Division of Labor does not intervene in disputes involving the scheduling of vacation leave or the denial of use of vacation leave for current employees.
REFERENCES
Colorado Revised Statutes 8-4-101(8)(a)(III) (Vacation Pay)
WEBSITE LINKS
www.coworkforce.com/ (Colorado Department of Labor and Employment)
1/28/08

Illinois

http://www.ilga.gov/commission/jcar/admincode/056/056003000B05200R.html
An employment contract or an employer's policy may require an employee to take vacation by a certain date or lose the vacation, provided that the employee is given a reasonable opportunity to take the vacation.  The employer must demonstrate that the employee had notice of the contract or policy provision.

Arkansas
Holiday pay, shift differentials, vacation pay or sick leave are not required to be offered to workers under Arkansas law.

http://www.arkansas.gov/labor/divisions/labor_standards_guide.html

Oklahoms

http://www.ok.gov/odol/documents/WHWageLawBooklet2007.pdf

(d) Benefits are special wages that are paid at certain times under certain conditions, according to the terms of the employment agreement. These include vacation, sick pay, paid holidays, severance, bonuses, and other similar advantages; provided, benefits do not include mileage reimbursement, travel expenses, “sweat equity”, or stock options as defined elsewhere in this Subchapter. Entitlement to benefits and/or the receipt thereof may be found upon proof of an established policy, or pursuant to the terms of a written agreement, and may be conditioned upon a certain level of job performance or any other criteria not otherwise unlawful.
(e) Any restrictions, criteria or conditions on benefits, including employer discretion and any limits thereon, must be contained in a written policy signed by the employee or they will not be held valid. The employer will be held to the terms of the benefit arrangement, and once the employee meets the criteria set forth therein, the benefit becomes part of wages earned and due and is thereupon payable as provided by statute in 40 O.S. § 165.1 et seq.
380:30-‑1-‑9.

Texas
http://www.twc.state.tx.us/news/efte/vacation_and_sick_leave.html

No Texas or federal law requires private-sector employers to provide
paid or unpaid leave of any kind.

No Texas or federal law requires employers to make payouts of accrued but unused paid leave, although in rare instances, usually involving express contracts, some courts have required such payments to former employees. That is a matter left to employers to specify in their company policies. Thus, it is very important for employers to develop a clear, preferably written, policy regarding paid leave and follow it exactly. If the policy is silent on what happens to accrued, untaken leave, it is not enforceable under the Texas Payday Law. An example of a policy that clearly states a company's position would be

Kansas
http://www.dol.ks.gov/ES/HTML/laws_RES.html#fringe

The law does not require your employer to offer vacation or sick
leave. However, many employers provide this as a benefit for their employees.

Missouri
http://www.dolir.mo.gov/ls/faq/faq_general.htm

Missouri has no law requiring paid vacations for private sector employment.  This is an issue that must be addressed by the employee with his or her employer.  The state of Missouri does not have a law that requires employers to offer any type of fringe benefit, such as insurance or sick leave.

Indiana
http://www.in.gov/dol/2345.htm

Can my employer mandate how I use my vacation time?
Yes.  Vacation time is seen as a fringe benefit and is up to the discretion of the employer.
When I leave my employment, is my former employer required to pay me for any accrued vacation time?

Yes.  Accrued vacation pay is considered a form of compensation.  Upon leaving employment, vacation pay is additional wages, earned weekly, where only the time of payment is deferred. As a result, an employee is entitled to a pro rata share of his/her accrued vacation at the time of termination.
However, if there is a company personnel policy or employment contract which states certain conditions under which accrued vacation pay will be given upon termination, the employee must meet those conditions in order to receive their accrued vacation pay.  These policies are at the discretion of the employer, but must be presented to the employee in writing prior to the ending of employment.

West Virginia

West Virginia has a very user unfriendly website. I could not find information on Vacation pay for current employees.

It did say the following:
http://www.wv.gov/Offsite.aspx?u=http://www.labor.state.wv.us/

(c) The term "wages" means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission or other basis of calculation. As used in sections four, five, eight-a, ten and twelve of this article, the term "wages" shall also include then accrued fringe benefits capable of calculation and payable directly to an employee: Provided, That nothing herein contained shall require fringe benefits to be calculated contrary to any agreement between an employer and his employees which does not contradict the provisions of this article.

(l) The term "fringe benefits" means any benefit provided an employee or group of employees by an employer, or which is required by law, and includes regular vacation, graduated vacation, floating vacation, holidays, sick leave, personal leave, production incentive bonuses, sickness and accident benefits and benefits relating to medical and pension coverage.

So, vacation IS a fringe benefit, but, if company policy (which an employee agrees to upon hiring) provides conditions under which the vacation is or is not paid, company policy rules.

Florida;

Florida has no vacation policy. Florida does not have a State Department of Labor.

Mississippi
http://www.mississippi.gov/ms_sub_template.jsp?Category_ID=7005


I could not find information on Mississippi, but here is the Mississippi department of labor contact numbers;


Louisiana

Louisiana does not require vacation pay, but if the company has a policy it must follow it's policy.

Vacation pay is subject to this law only if 1) the employee is deemed eligible for and has accrued vacation time under the employers stated vacation policy, and 2) the employee has not taken or been compensated for the vacation time prior to the discharge or resignation.




Sorry it took so long to answer but I had to spend a lot of time researching to find the answers.

Shirley