Employment Law/PTO Payback


Can an employer "legally" deduct unaccrued PTO wages previously paid to an employees who are now leaving the company? If so, how? The PTO balances show negative dollars.
This question would cover California, Texas, Colorado, Illinois, Indiana, Wisconsin, Ohio, Pennsylvania, New Jersey, New York, Massachusetts, Connecticut, Washington, D.C., Georgia, Florida.

Thanks in advance for your help!

Pat - I'll give you the federal answer, which covers all of those states.  Permitted deductions from pay are limited to the usual - taxes, health benefits, union dues, etc.  If an employer wants to make additional deductions, it needs to obtain written permission from the employee to do so.  (In Massachusetts, even that won't work because of a state labor department determination.)

It's trickier for salaried exempt employees.  Allowable deductions from their pay fall into six specific categories, none of which is to repay PTO taken before it was accrued.  If the employee doesn't want to allow the deduction, the employer can either violate federal law or eat the loss.

Most employers who face this dilemma require that employees sign an agreement to repay the PTO out of their pay over a specific time period before allowing the vacation to be used.  The employer cannot deduct so much per pay that the employee is left with less than the minimum wage for each hour of work (gross, of course).  

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Margaret M. deMarteleire


I can answer most questions about employment law, federal or state. I am an attorney, not an HR professional, so questions about HR careers, coursework, prospects, etc. are not within my scope.


Attorney for 20 years, currently working exclusively with employment law - FLSA, FMLA, federal contracts, pay, etc.

Temple University School of Liberal Arts, BA, Rhetoric & Communication, 1982 Temple University School of Law, JD, 1990 Certificate in HR, Cornell University ILR School, 2006

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