In the state of California, the issue of whether an employer can withhold payment for accrued paid time off after an employee resigns is a matter of concern for many workers.
California labor laws protect the rights of employees, and this extends to their earned benefits, such as PTO.
PTO as earned wages
California law is clear on the matter. When an employee leaves their job, whether voluntarily or involuntarily, they still have the right to receive compensation for any accrued and unused PTO. The state considers PTO as a form of earned wages, and it falls under the same legal protections as regular paychecks.
Employer policies and PTO
However, there are some important caveats to this rule. Employers are not obligated to provide PTO in the first place. If they do offer it, they must comply with the state’s labor laws regarding its payment. Additionally, the employer may have a policy in place that specifies PTO parameters regarding accrument and use. It is important for employees to be aware of their company’s specific PTO policy.
Options for withheld PTO
If an employer withholds PTO pay after an employee quits the employee can take several steps to rectify the situation. First, communicate with the employer. In many cases, misunderstandings or errors can lead to delayed PTO payments. If the employer remains unresponsive or refuses to release the PTO pay, the next course of action is to file a wage claim with the California Labor Commissioner’s Office.
While 46% of U.S. workers do not use all of their PTO, they have entitlement to it, and there are legal avenues available to recover unpaid PTO wages if an employer fails to comply.