Paid Time Off (PTO): Massachusetts Law
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Vacation, paid sick time, and personal days all are a form of paid time off, or PTO. Some employers group them all together, while others allow you to accrue them and use them separately. There are differences between these types of PTO under the law however, especially when it comes to what an employer is required to provide and what must be paid out at employment termination.
Vacation TimeEmployers are not required to provide vacation time. If they do offer paid vacation, however, it is considered part of the wages package and is subject to the Massachusetts Wage Act.
Because unused vacation must be paid at the end of employment, it is important to pay attention to how it accrues, and whether it rolls over from year to year. Most commonly, employers will have accrue vacation in 1/12 increments each month. It is also common for employers to have a policy stating that vacation unused by the end of the year does not roll over into the follow year. Under that policy, if you have three weeks, or 15 days, of vacation each year, you will accrue that time at 1.25 days per month, beginning the first of the year each year. Even if you have only used two weeks by the end of the year, you will start all over again at zero at the first of the year. In that scenario, if you are terminated on the first of the year, there will be no vacation pay owed. If you are terminated on the last day of the prior year, however, you would be owed vacation pay for the third week that you did not use. Some employers front load the vacation, and your time is accrued immediately at the first of the year. Some also allow rollover from year to year, or rollover with management approval. If there is no vacation accrual policy in place, the presumption is that it accrues in even increments over the course of the year. |
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Did You Know...
Usually when we hear from people with questions or concerns about vacation time or PTO, it is after an employment termination. If that has happened to you, you may have other questions, including: Was the termination lawful? Should you sign a severance agreement that was offered? How long do you have to decide if you want to challenge the termination? If any of these are on your mind, check out our employment termination frequently asked questions, or just give us a call at (781) 784-2322 to discuss your situation. |
Paid Sick Time
Massachusetts now requires sick time be provided to all employees, whether part time or full time. The minimum requirement is either one hour for every 30 hours worked, or 40 hours per year.
This is only required to be paid if there are 11 or more employees that work for the business. Unused sick days do not have to be paid out at termination.
This is only required to be paid if there are 11 or more employees that work for the business. Unused sick days do not have to be paid out at termination.
Combined PTO Policies
Many employers combine all paid time off onto one PTO "bank." So instead of getting five sick days and 10 vacation days, for example, you would have a total of 15 days to use for either sick time or vacation.
If the PTO bank does not specify which time is for sick leave and which time is for vacation, the employer may end up owing all of the unused time at termination, even though some was intended to be for sick time.
If the PTO bank does not specify which time is for sick leave and which time is for vacation, the employer may end up owing all of the unused time at termination, even though some was intended to be for sick time.
Unlimited Paid Time Off and Wage and Hour Laws
Unlimited PTO is a growing trend. Instead of specifying the number of days an employee can take, the company has a policy that says you can take as much time as you want.
On the surface, this sounds great for employees. In reality, it appears people with unlimited PTO actually take less vacation than those with a set allotment. This is perhaps because if you don't have a clear idea of what is an acceptable amount of vacation, you may be hesitant to use more than a week or two for fear of disapproval from your manager or supervisor.
It also complicates the payout at termination. Employers with unlimited PTO will argue that there is no payout required, because there are no actual days "accrued" beyond what you actually used. Courts have been largely unwilling to accept this as a complete dodge of the vacation payout requirement. Instead there will be some effort made to quantify unused time. This could be by looking at the individual's average used vacation over a period of time, what other employees took on average, or some other metric. What is certain is that it is more complicated to determine the amount owed if you leave a company with an unlimited PTO policy.
On the surface, this sounds great for employees. In reality, it appears people with unlimited PTO actually take less vacation than those with a set allotment. This is perhaps because if you don't have a clear idea of what is an acceptable amount of vacation, you may be hesitant to use more than a week or two for fear of disapproval from your manager or supervisor.
It also complicates the payout at termination. Employers with unlimited PTO will argue that there is no payout required, because there are no actual days "accrued" beyond what you actually used. Courts have been largely unwilling to accept this as a complete dodge of the vacation payout requirement. Instead there will be some effort made to quantify unused time. This could be by looking at the individual's average used vacation over a period of time, what other employees took on average, or some other metric. What is certain is that it is more complicated to determine the amount owed if you leave a company with an unlimited PTO policy.
PTO Payout at Termination: What You Should Do
If you leave your job for any reason and have questions about whether you were fully paid, here are a few steps you can take even before contacting an attorney:
- Make sure you have a copy of your last few paystubs, which should reflect the accrual as of your termination.
- Try to find a copy of the employee handbook or any other written documentation of the employer's vacation or PTO accrual policies.
- Check your own records to be sure they have accurately counted the vacation or sick time that you did take.
How We Can Help
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If an employer withholds your final vacation pay, it’s a serious offense that not only breaks the law but causes stress and anxiety for you. This is why the laws are so strict, and impose such severe penalties on employers. The law recognizes that all workers depend on their wages to live their own lives, pay their bills, and take care of their families.
We can help you protect those rights and recover the money that is owed to you. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
We can help you protect those rights and recover the money that is owed to you. You can use the button below to schedule a call back from a member of our team, or give us a call at 781-784-2322.
