PTO and Payouts

kmaries

The company that I work for currently has a provision in the PTO policy allowing a "Hardship" payout once per year for individuals with balances that are over certain amounts (it depends on the length of service). However, the employee can not cashout more then half of the balance they have available. I have been asked to make the policy more current.

Can anyone give me some advise has to what their payout programs allow? Mainly, what frequency do you allow payouts? Do you have to have a "hardship" or can you cash out at anytime? What amounts do you allow - minimum or maximum? Do you require so much of a balance to remain? What qualifies the individual to get the payout? And lastly, how does your process work?

Any help would be much appreciated!

Down_the_Middle

I would recommend looking at your state statutes to confirm that this is permissible. Many states view PTO/VAC accrual as wages and require that it be paid accordingly. Offering hardship payments (at a reduced rate) might violate the requirement. I know of a case where this exact thing occured in a southern state and the employer was ordered to stop the program and reimburse the employees who received a reduced payout. Your circumstances are probably a little different, but I think it warrants a closer look at your state law.

kmaries

We do payout the employees at their normal rate of pay.