Pay off vacation time?

We are a public sector employer and our employees earn vacation/annual leave. Can we as the employer unilaterally pay down or pay off those leave balances? It seems like "earned benefits" plays into this equation, but I can't recall how. Input appreciated. Thank You


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  • I am not sure I have a definitive answer, but I can tell you what I have experienced. At one point we had auditors who said we did have too much liability out there on unused vacation leave. We capped it and did unilaterally pay everyone down to the cap.

    We also allow ee's to "sell" back time 2x per year. .obviously that is not the employer doing anything unilaterally. . employee choice. . but we do pay it down at their request.

    Hope this helps.
  • Welcome to the forum brybol!

    I think your state laws may play into this. But if you pay out at 100%, make sure there is no discrimination and give employees plenty of warning you should be ok.

    Here we are not required to pay out all leave, and until a few years ago only paid out a portion of PTO when employees left. Now we pay 100% when employees leave, but employees who buyout PTO time only get it at 50%.

    Good luck!

  • If you are not unionized, I don't see why you could not do it. You are paying the employee for the earned vacation, not taking it away from them. However, I would draft a policy stating under what conditions you would cash out the time rather than do it "unilaterally." Then just apply the policy consistently.
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