Sick Time with Use It or Lose policy in TN. Is this legal?

WAS

I read the passage below today on another HR related website. Specifically, it said, "There are ... 15 states (MT and TN added in last two years) which do not allow for a use it or lose it policy for sick leave accrual. That is, should an employee have sick leave left at the time of termination, accrued but unused sick leave must be paid".

Is this true? My company is in TN and allows for sick leave to be accrued at a rate of 6 days per year. This sick leave can be carried over from year to year with a maximum accrual of 60 days. Our handbook indicates this "accrued" time is not payable at termination, however. Is the statement I read on this website true?

Theresa Gegen TX

I looked at the official State of Tennessee website about employment (and specifically pay laws). I did not find that as a law. The law seems to be that whether the time must be paid is based on the written policy of the employer.

Good Luck!

Brad Forrister

I don't know of any Tennessee law requiring payment of accrued sick leave on termination. There is a law requiring payment of accrued vacation and comp time, but only if the company has adopted a policy or entered a labor agreement to that effect. Here's the relevant portion of TCA 50-2-103:

(3) For the purposes of this subsection, the final wages of an employee who quits or is discharged shall include any vacation pay or other compensatory time that is owed to the employee by virtue of company policy or labor agreement. This subdivision does not mandate employers to provide vacations, either paid or unpaid, nor does it require that employers establish written vacation pay policies.


Brad Forrister
Director of Publishing
M. Lee Smith Publishers