Do Employers Have to Pay Out Unused PTO? By State (2026)
Whether employers must pay unused vacation or PTO when you leave, state by state.
| State | Unused vacation / PTO payout |
|---|---|
| Alabama | No Alabama law requires payout of unused vacation or PTO. It depends on the employer's written policy or employment contract. Cities and counties cannot require vacation payout. Code of Alabama § 25-7-41(b) |
| Alaska | Only if the employer promised it. Payout of unused vacation is governed by the employer's policy or agreement. Alaska Wage and Hour Employee FAQ |
| Arkansas | Only if the employer's policy promises it. To claim unpaid vacation, sick, holiday, bonus or severance pay through the Division of Labor, the worker must provide a copy of the company policy showing it is payable. Arkansas Division of Labor, Wage Claims |
| California | Yes. Earned vacation and PTO are wages that cannot be forfeited; all earned, unused vacation or PTO must be paid at the final rate of pay when employment ends, for any reason. 'Use it or lose it' policies are illegal, although a reasonable cap on accrual is allowed. Cal. Labor Code § 227.3; California Labor Commissioner, Vacation FAQ |
| Colorado | Yes. Earned, unused vacation pay (including PTO that can be used for vacation) must be paid when employment ends for any reason, whether the employee is fired or quits. Policies that forfeit earned vacation are void. Sick leave or other leave limited to specific needs does not have to be paid out. Colorado Wage Act (C.R.S. Title 8, Article 4); CDLE INFO #3E |
| Connecticut | Only if the employer's policy or a collective bargaining agreement provides for payout of accrued vacation, holidays, sick days or other leave at termination. If it does, the employer must pay it as wages. Conn. Gen. Stat. § 31-76k |
| Delaware | Depends on the employer's policy or agreement. Vacation pay promised under an agreement must be paid within 30 days after it is due. Employers with more than 3 employees must make their vacation and sick leave policies available to employees in writing or by posted notice. 19 Del. C. §§ 1108(3), 1109 |
| Georgia | No state requirement. Neither federal nor Georgia law requires employers to provide vacation, sick or personal leave; payout depends on the employer's policy or agreement. Georgia Department of Labor FAQ (Fair Labor Standards Act) |
| Hawaii | Not required by statute; it depends on the employer's policy. Employers must give employees their vacation and sick leave policies in writing or by posted notice. Hawaii courts have held that unused vacation pay is not 'wages' under the wage payment law. HRS § 388-7(3); case note to HRS § 388-3 (108 Haw. 411 (2005)) |
| Illinois | Yes. If an employment contract or policy provides paid vacation, all earned, unused vacation must be paid at the final rate of pay when the employee quits or is fired, and no contract or policy can forfeit it (unless a collective bargaining agreement provides otherwise). 820 ILCS 115/5 |
| Indiana | Generally yes. Accrued vacation pay is treated as compensation, and an employee may be entitled to a pro rata share of accrued vacation at termination. If a company policy or employment contract sets conditions for payout, those conditions must be met. Indiana Department of Labor FAQ |
| Iowa | Only if the employer has a contract, policy or practice of paying vacation to departing employees. Employers must follow their own policies on sick time, vacation and holidays. When vacation accrues pro rata under a policy or agreement, it is calculated by the part of the year actually worked. Iowa Code § 91A.4; DIAL Wage Claims FAQ |
| Kentucky | Kentucky law counts vested vacation pay as wages, so earned vacation that has vested under the employer's policy or agreement must be paid like other wages. KRS 337.010(1)(c) |
| Louisiana | Yes, if under the employer's vacation policy the employee was eligible for and had accrued paid vacation that was not taken or paid out. Earned vacation pay cannot be forfeited. La. R.S. 23:631(D) |
| Maine | Yes, for employers with more than 10 employees: all unused paid vacation accrued under the employer's policy on or after January 1, 2023 must be paid out when employment ends. Vacation pay has the same status as earned wages. Public employers are exempt, and a union contract that addresses vacation payout takes priority. 26 M.R.S. §626 |
| Maryland | Accrued leave must be paid at separation unless the employer has a written policy limiting payout, told the employee about its leave benefits at hire, and the policy does not entitle the employee to payout. Md. Code, Labor & Employment §3-505(b) |
| Massachusetts | Yes. Vacation and holiday pay owed under an oral or written agreement count as wages and must be paid at separation on the same timeline as final wages. Unused earned sick time does not have to be paid out. M.G.L. c. 149, §148; c. 149, §148C(d)(7) |
| Michigan | Depends on the employer's written contract or policy. Fringe benefits such as vacation pay must be paid according to the terms of the written contract or policy. MCL 408.473 |
| Minnesota | Depends on company policy. Benefits such as vacation, sick leave and severance are due as the policy provides, and must be paid within 30 days of when they become due. Minn. Stat. 181.74; Minnesota Department of Labor and Industry, Employment termination |
| Nebraska | Yes. Earned but unused vacation leave counts as wages due at separation. Other paid leave (such as sick leave) does not have to be paid out unless the employer agreed to do so. Neb. Rev. Stat. 48-1229 |
| New Hampshire | Vacation pay, personal days, holiday pay and sick pay count as wages when due if they are part of the employer's practice or policy, so payout at separation depends on that policy. RSA 275:43, V |
| New Jersey | Not required by state law. If an employer offers vacation or other paid time off, it must follow its own established policy or agreement, and an employee may have a claim if it does not. New Jersey Wage and Hour worker FAQs |
| New Mexico | Yes. Accrued vacation pay counts as wages in New Mexico, so vacation pay earned under the employer's vacation policy and still unused must be paid out when employment ends, on the same deadline as other final wages. No statute requires employers to offer holiday, sick or severance pay in the first place. NMDWS Labor Relations Division Investigations Manual (2025); NMDWS Labor Relations FAQs |
| New York | Depends on the employer's policy. If the employee earned vacation time and there is no written policy saying it is forfeited, the employer must pay accrued vacation at separation. Employers must notify employees in writing or by posting of their vacation and leave policies. New York State Department of Labor, Wages and Hours FAQ; Labor Law §195(5) |
| North Carolina | Employers are not required to offer vacation pay, but if they do, they must follow their own policy. Vacation can be forfeited at separation only if the employer gave written notice of a forfeiture policy; employees not notified cannot lose it. G.S. 95-25.12 |
| North Dakota | Yes, in most cases. Once paid time off is available to use, unused PTO counts as wages and must be paid at separation. Two exceptions: (1) if the employee quits, the employer may withhold it when the employer gave written notice of this limit at hire, the employee worked there less than one year, and the employee gave less than five days' notice; (2) PTO that was awarded but not yet earned may be withheld if the employer gave written notice in advance. 'Use it or lose it' policies are allowed with notice and a fair chance to use the time. N.D.C.C. § 34-14-09.2; N.D. Admin. Code § 46-02-07-02(12) |
| Oklahoma | Not required by state law. If the employer has a written policy (such as a handbook) that promises payout of vacation or sick leave, that pay is treated as wages and must be paid as promised. 40 O.S. § 165.1 et seq.; Oklahoma Department of Labor guidance |
| Oregon | Not required by law. Vacation pay is a benefit the employer may choose to offer, but the employer must follow its own established policy or agreement on paying out accrued vacation at separation. ORS 652.140 (final wages); BOLI guidance |
| Pennsylvania | Not required by law. Paid sick leave, holiday pay and other pay for hours not worked are generally protected only when the employer expressly promised them in official documents, such as an employee handbook or memo; then the employer must follow that promise. Wage Payment and Collection Law (43 P.S. § 260.1 et seq.) |
| Rhode Island | Yes, after one year of service. Employers do not have to offer paid vacation, but if they do, an employee who leaves after completing at least one year must be paid accrued vacation (in full or prorated under the employer's policy or agreement) on the next regular payday. R.I. Gen. Laws § 28-14-4 |
| South Carolina | Depends on the employer's policy. State law does not require paid vacation or sick time, but an employer that offers it must give employees notice of the policy and follow it. S.C. Code § 41-10-30; LLR FAQ |
| South Dakota | No state law requires paid leave or its payout. Whether vacation pay is paid at separation (for example, when an employee leaves without two weeks' notice) depends on the agreement between employer and employee. DLR, South Dakota Labor and Employment Laws: What You Need to Know |
| Tennessee | Not required by state law. Unused vacation, sick pay or PTO must be paid at separation only if the employer's policy or a labor agreement says so. Tenn. Code Ann. § 50-2-103(a)(3) |
| Texas | Required only if the employer's written policy or agreement provides for it. Employers set their own policies on how vacation, holiday, sick leave or severance is earned and whether unused time is paid out. Texas Payday Law (Tex. Lab. Code ch. 61) |
| Utah | Not required by state law. Utah labor law generally does not require employers to provide benefits such as paid vacation; payout depends on the employer's policy or agreement. UALD wage claim guidance |
| Washington | Not required. Vacation, personal holidays and severance are voluntary benefits the employer may choose to pay out. Agreed-upon benefits can be pursued in small claims court or with an attorney. Paid sick leave has separate rules. L&I guidance |
| West Virginia | Depends on the employer's written policy or agreement. Employers must tell employees in writing (or by posted notice) their policies on vacation pay, sick leave and similar matters, and fringe benefits due under an agreement must be paid according to its terms. W. Va. Code §§ 21-5-4(b), 21-5-9(3) |
| Wisconsin | Not required by statute. DWD can pursue claims for vacation pay and similar benefits when they were agreed between employer and employee or provided under the employer's established policy. Wis. Stat. ch. 109 |
| Wyoming | Wyoming law does not require paid vacation. If vacation is offered, earned vacation must be paid at separation unless a written policy clearly says otherwise and the employee acknowledged it; employers may require notice (for example, 10 days) to qualify for payout. Sick and personal leave do not have to be paid out. 'Use it or lose it' rules are allowed if employees had a fair chance to use the time. W.S. 27-4-507; W.S. 27-4-501(a)(iii) |
General legal information, not legal advice. Laws change and local rules can differ; check the linked official source or talk to a lawyer about your situation.