Asheville partner Jonathan Yarbrough provided insight for a Washington Post story on the workplace policy of unlimited vacation, and what this can mean for workers in terms of severance pay and payouts for earned PTO during layoffs.
While employees typically start off the year with a set number of days they are owed, or accrue over time, only certain states legally require employers to pay out that vacation time that has been earned and left on the table – most states go by the employer policy or an employment contract’s predetermined agreement. In some cases, unlimited vacation may actually mean that employees have technically accrued no PTO, and do not have to be paid for those days.
However, despite the sometimes lack of legal requirement, many employers, particularly in competitive industries or with multi-state workforces, choose to pay out the vacation time or offer it when employees exit as a show of goodwill.
“In the grand scheme of things, it often isn’t big numbers and you can alleviate a costly legal fight,” Yarbrough explained. “It really is just frankly a choice, unless you’re in one of the states that require a payout of earned wages.”
More employers have begun offering unlimited paid time off policies, allowing workers to take the time they need instead of being allotted a certain number of days. While this may be ideal for employees looking for flexibility, employers also do not have to pay out a certain number of hours or days when an employee leaves.
“It’s a great recruiting tool,” Yarbrough said. “And generally upon termination, there’s nothing to pay.”
The full article is available here.