United States · Paid time off

PTO payout laws by state

Federal law does not answer this question — the FLSA does not require payment for time not worked, so each state decides what happens to your unused vacation or PTO when employment ends. The answers fall into three groups. Ten states treat earned vacation as wages that must be paid out. In six more, the employer's policy controls — but a policy that is silent about forfeiture defaults to paying you. In the rest, the written policy or agreement governs, for better or worse. Every row in the table below was checked against that state's labour agency guidance or statute text; where a state publishes no rule, the table says so rather than guessing.

Information only, not legal advice: this guide is general information. Your own case turns on your employer's actual policy text and your state's current law — the sources named in each row are where to confirm both. To value the hours themselves, use the PTO payout calculator.

How this table was checked

Each state's row rests on an official source checked for this guide on October 29, 2026: the state labour agency's published guidance (an FAQ, fact sheet or information notice), the text of the wage-payment statute or administrative code, or — where a state publishes neither and the rule comes from its courts — the case law, labelled as such. Forty-four states rest on an agency or statute source; one (Ohio) rests on case law alone. For five states — Alabama, Florida, Mississippi, South Dakota and Vermont — the table uses the honest fallback, "no statute found in this review", because those states genuinely publish no payout rule; in them, the employer's policy governs in most cases, and a written promise to pay remains enforceable as a contract matter. One extra row covers the District of Columbia, which is not a state but is a place people work. Two vocabulary warnings: most of these laws were written about vacation, and combined "PTO" banks are usually handled the same way when the policy does not separate them; and almost none of them extends the same protection to sick leave.

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The 50-state table

State	What happens to unused vacation / PTO at separation	Basis
Alabama	No Alabama statute addresses payout of unused vacation at separation (the state has no general wage-payment law on the point), so the employer's policy or agreement governs in most cases.	No statute found in this review
Alaska	Payout follows the employment contract: state law counts accrued vacation as part of the "rate of pay" when it is a contractual condition of employment, and the labour department enforces the employer's own policy or promise.	AS 23.05.160; Alaska DOLWD
Arizona	Vacation pay counts as "wages" when the employer has a policy or practice of paying it — the policy's terms decide whether the balance is paid at separation.	A.R.S. §23-350(7)
Arkansas	Final wages include any vacation pay owed "by virtue of company policy or labor agreement"; the statute does not itself require employers to offer vacation.	Ark. Code §11-4-405(d)
California	Must be paid. Earned vacation is wages: it vests as work is performed, cannot be forfeited ("use it or lose it" is prohibited), and all vested vacation must be paid at the final rate of pay on termination, unless a collective bargaining agreement provides otherwise. Reasonable accrual caps are allowed.	Labor Code §227.3; DLSE Vacation FAQ
Colorado	Must be paid. If the employer provides paid vacation, all vacation pay that is "earned and determinable" under the agreement must be paid at separation, and earned vacation cannot be forfeited or waived. "Unlimited" PTO is ordinarily not determinable, so ordinarily not payable.	C.R.S. §8-4-101(14)(a)(III); CDLE INFO #3E
Connecticut	If the employer's policy or a collective bargaining agreement provides for payment of accrued fringe benefits (including vacation) at termination, the employee must be compensated in wages, at no less than the earned average rate for the accrual period.	Conn. Gen. Stat. §31-76k
Delaware	An employer that has agreed to pay wage supplements such as vacation pay must pay what the agreement requires, within 30 days of when it is due; the agreement's terms govern.	19 Del. C. §1109
Florida	No Florida statute addresses payout of accrued vacation at termination, so the employer's policy or agreement governs in most cases; a policy promise is enforced as a contract matter.	No statute found in this review
Georgia	Neither federal nor Georgia law requires an employer to provide vacation leave, and no Georgia statute sets a payout rule, so the employer's policy or contract governs.	Georgia Department of Labor, Individuals FAQ
Hawaii	Employers that offer vacation must state the policy in writing; accrued, unused vacation does not have to be paid out at separation unless the employer's policy or a contract promises it, or an established custom does.	DLIR Wage Standards Division; Casumpang v. ILWU (Haw. 2005)
Idaho	An employer that provides paid vacation must comply with its established policy or contract; payout at separation is owed only if the policy or contract requires it.	Idaho Department of Labor, Labor Law Guide
Illinois	Must be paid. The monetary equivalent of all earned vacation must be paid as final compensation at the final rate of pay — at separation if possible, otherwise by the next regularly scheduled payday — unless a collective bargaining agreement provides otherwise; no policy may forfeit earned vacation at separation.	820 ILCS 115/5
Indiana	Accrued vacation pay is compensation: the labour department's position is that an employee is generally entitled to a pro-rata share at termination, unless the employer's policy or contract sets conditions that were not met.	Indiana Department of Labor FAQ
Iowa	Where vacation is due under an agreement or a policy establishing pro-rata accrual, the increment is paid in proportion to the fraction of the year actually worked.	Iowa Code §91A.4
Kansas	No statute mandates payout; labour department guidance is that payment depends on company policy or established practice, and a written policy promising payout is enforceable.	Kansas Department of Labor guidance
Kentucky	"Wages" include vested vacation pay and similar advantages agreed with the employee or provided as an established policy — and an employee who leaves or is discharged must be paid all wages earned, in full.	KRS 337.010(1)(c), 337.055
Louisiana	Must be paid, when earned under the policy. Vacation pay is an amount due when, under the employer's stated policy, the employee was eligible for it, had accrued the right to it, and had not taken or been paid for it; vacation pay actually earned under the policy cannot be forfeited.	La. R.S. 23:631(D)
Maine	Must be paid. All unused vacation accrued under the employer's policy on or after January 1, 2023 must be paid on cessation of employment; employers with 10 or fewer employees and public employers are excepted, and a collective bargaining agreement can supersede.	26 M.R.S. §626
Maryland	The employer's written policy, communicated at hiring, controls — but where the employer has no written policy limiting payment, the employee is entitled to the cash value of unused earned vacation.	Maryland Department of Labor, Termination Pay guide
Massachusetts	Must be paid. Vacation payments due under an oral or written agreement are "wages": accrued vacation must be paid at separation — on the day of discharge if the employee is fired, by the next regular payday if they resign. Agreements to forfeit earned vacation are not permitted.	M.G.L. c.149 §148; Attorney General Advisory 99/1
Michigan	Fringe benefits are paid according to the written contract or policy: if the policy provides for payout, the employer must pay; if it does not address payout, the labour agency's position is that payment is not legally required.	Michigan LEO Wage & Hour FAQ
Minnesota	Company policy determines when benefits such as vacation are due; benefits are payable within 30 days of when they become due under the policy.	Minnesota Department of Labor and Industry
Mississippi	No Mississippi statute addresses payout of unused vacation at separation, so the employer's policy or contract governs in most cases.	No statute found in this review
Missouri	Vacation pay is a discretionary benefit, not wages: the labour department's position is that it is owed only where the employer has contracted to provide it.	Missouri Department of Labor FAQ
Montana	Must be paid. Once vacation is earned under the employer's policy it is wages, due and payable like regular wages; use-it-or-lose-it is not permitted, though accrual caps are allowed.	Montana Department of Labor & Industry FAQ
Nebraska	Must be paid. Any earned but unused vacation at separation is paid as wages on the final paycheck; other paid leave is excluded unless specifically agreed.	Nebraska Department of Labor FAQ; §48-1229(6)
Nevada	State law requires payment for time worked and does not require payout of unused leave at separation; payment is owed where an agreement or policy provides for it.	Office of the Labor Commissioner; NRS 608.0197
New Hampshire	Vacation pay that is a matter of employment practice or policy is wages when due; where the policy does not specify what happens at separation, the labour department's position is that it generally must be paid.	RSA 275:43(V); NH Department of Labor
New Jersey	Vacation and similar fringe benefits are not required by state law; if the employer provides them, they are administered in accordance with the established policy or employment agreement.	NJ Department of Labor, Wage & Hour FAQs
New Mexico	Vacation pay counts as wages when it is compensation under the employer's written policy; vacation owed under the policy is paid with the other wages due at discharge.	NMAC 11.1.4.7(O); NM Workforce Solutions
New York	The employer's written policy controls, including forfeiture conditions — but only if employees were told of them in writing. If vacation was earned and there is no written forfeiture policy, the employer must pay for the accrued time.	NY Department of Labor FAQ; Labor Law §§195(5), 198-c
North Carolina	Vacation benefits are provided, or paid in lieu, according to company policy or practice; a forfeiture rule applies only if employees were notified of it as the statute requires — employees not so notified are not subject to forfeiture.	N.C.G.S. §§95-25.12, 95-25.13; NC Department of Labor
North Dakota	Must be paid. Earned PTO is wages, and a policy or agreement cannot forfeit earned PTO at separation. One narrow exception: a private employer may withhold it from an employee who quits only if a written limitation was given at hiring, the employee worked under a year, and gave under five days' notice.	N.D. Admin. Code 46-02-07-02(12); §34-14-09.2
Ohio	No statute sets the rule; Ohio courts treat the employer's policy or contract as controlling — and where it is silent, accrued vacation is generally owed as a deferred, earned benefit.	Case law (no agency text found)
Oklahoma	Vacation pay is "wages" only if agreed between employer and employee or provided in an established policy; the labour department accepts accrued-leave claims only on express written policy language or an established practice of paying.	Okla. Admin. Code §380:30-1-5; Oklahoma DOL
Oregon	Vacation pay is not required, but an employer must honour its established policy or agreement — including a policy of paying out accrued vacation at discharge.	Oregon Bureau of Labor and Industries
Pennsylvania	"Wages" under the Wage Payment and Collection Law include fringe benefits and wage supplements — vacation, separation and holiday pay — to the extent an agreement provides for them; the agreement's terms govern.	43 P.S. §260.2a
Rhode Island	Must be paid. After one year of service, vacation pay accrued or awarded under a collective bargaining agreement, a written or verbal company policy, or any other agreement becomes wages, payable in full or pro-rated with the other wages due on the next regular payday.	R.I. Gen. Laws §28-14-4(b)
South Carolina	"Wages" include vacation, holiday and sick payments due under an employer policy or employment contract; on separation, entitlement to earned unused vacation depends on the company's policy.	S.C. Code §41-10-10(2); SC LLR FAQ
South Dakota	No South Dakota statute addresses payout of unused vacation at separation, so the employer's written policy or contract governs in most cases.	No statute found in this review
Tennessee	Final wages include any vacation pay owed "by virtue of company policy or labor agreement"; the statute does not require employers to provide vacation or written policies.	Tenn. Code §50-2-103(a)(4)
Texas	An employer must pay for unused vacation or other benefits only if its written policy or an agreement provides for them.	Texas Workforce Commission, Texas Payday Law
Utah	Wages include vacation, holiday, sick leave, PTO and severance "if due under an agreement with the employer or under a policy of the employer" — the agreement or policy terms govern.	Utah Admin. Code R610-3-4(B)
Vermont	No Vermont statute found in this review sets a payout rule; where the employer's written policy promises payment at separation it becomes a wage obligation, so the policy governs in most cases.	No statute found in this review
Virginia	Employers may set any vacation policy or none; the wages the state requires in final pay are for work performed, so the employer's policy governs unused vacation.	Va. Code §40.1-29; Virginia DOLI
Washington	Washington does not require employers to provide vacation or pay for it; these are voluntary benefits found in employer policies or collective bargaining agreements, which the labour agency does not enforce.	Washington Labor & Industries
West Virginia	Accrued fringe benefits that can be calculated — including vacation — are part of "wages due", and on separation they are paid according to the time, terms and conditions of the employer-employee agreement.	W. Va. Code §21-5-1(c), (l); §21-5-4
Wisconsin	"Wages" include vacation pay and other advantages agreed with the employee or provided as an established policy; the agreed or policy terms govern payment.	Wis. Stat. §109.01(3)
Wyoming	Earned vacation under the employer's policy must be paid unless the employer has a written forfeiture policy that the employee acknowledged in writing.	Wyo. Stat. §27-4-507; Wyoming DWS
District of Columbia (not a state)	Absent an agreement to the contrary, accrued but unused vacation is treated as earned wages and must be paid on termination.	Case law (D.C. Court of Appeals)

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The three groups, explained

Group one — the balance is wages. California, Colorado, Illinois, Louisiana, Maine, Massachusetts, Montana, Nebraska, North Dakota and Rhode Island start from the same idea: vacation you have earned is pay you have earned, deferred. That is why forfeiture clauses fail there, why the payout is priced at your final rate, and why state wage-claim processes can recover it. The differences are in the edges — Maine's rule reaches only accruals from 2023 onward and exempts very small employers; Rhode Island's starts after a year of service; Louisiana's is keyed to what the employer's own policy made earnable.

Group two — policy governs, silence pays. Indiana, Maryland, New Hampshire, New York, North Carolina and Ohio (the last by case law) also start from the employer's policy — but they refuse to let silence work against the employee. A forfeiture has to be written, communicated, and in New York and North Carolina notified in the specific way the statute demands; fail that, and the balance is owed. Wyoming reaches a similar place by a different door: forfeiture works only under a written policy the employee acknowledged in writing.

Group three — the policy is the law of the case. In the remaining states, the handbook clause decides, including clauses that pay nothing at separation. Two limits still matter even there: a policy that promises payout is enforceable (several states' wage definitions capture promised benefits expressly), and an employer generally cannot rewrite the rule retroactively for hours already earned under the old one. If you are planning a resignation in a group-three state, the rational move is arithmetic, not law: use the time, or time the exit, before the balance evaporates.

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What to do before your last day

1. Get the policy in writing. The handbook section on separation and your final pay stub are the two documents every row of the table ultimately points to; save copies while you still have access. 2. Fix your balance. Note the exact unused hours on your last day — if you are owed a payout, the payout calculator turns them into the gross figure to expect. 3. Mind the final-paycheck deadline. Where a payout is owed it generally rides the final paycheck, and states set real deadlines for that check. 4. If it does not arrive, use the wage-claim route. Most state labour agencies run a free wage-claim process; it exists precisely for final-pay disputes, and in wage-status states the agency can pursue the balance as unpaid wages. 5. Still accruing? If you are not leaving yet, the accrual calculator shows how the balance builds under your policy's structure.

Common questions

Does federal law require my employer to pay out unused PTO?

No. The Department of Labor's position is that the FLSA does not require payment for time not worked, including vacations; everything in the table above is state law, state agency practice, or the employer's own binding policy.

My company has one combined "PTO" bank, not separate vacation. Do these rules apply?

Usually yes in the wage-status states, because the protection follows earned paid leave the policy grants for vacation-type use — Colorado's guidance addresses PTO directly. Where a policy genuinely separates sick leave, the sick portion is commonly treated differently.

Can a policy I never saw forfeit my vacation?

In group-two states, that is exactly the fact pattern the law protects against: an uncommunicated forfeiture generally fails. In group-three states the answer is harder, which is why step one above — obtaining the actual policy — matters before, not after, your last day.

I work remotely for a company in another state. Which state's row applies?

Generally the state where you work, not where the company is headquartered — but multi-state employment is one of the genuinely fact-specific corners of this area, and it is worth a question to the labour agency of the state where you perform the work.

Image credits

The United States Capitol photograph is by Diliff, via Wikimedia Commons, public domain. The two-professionals photograph is by Sora Shimazaki, via Pexels, Pexels License. The document-signing photograph is by Helloquence, via Wikimedia Commons, license CC0. All three were already in this site's licensed collection; all were converted to WebP and resized. No image on this page was generated by AI.

Sources

Every other state's row rests on the agency guidance, statute or case law named in its Basis column, read on the same date; the full per-state verification log is kept in the batch report behind this page.

About this page

Informational content only — not financial, legal or tax advice, and not a government service. State rules were checked against the official sources named on this page. Last reviewed: October 29, 2026. ⚑ English native editorial review: pending (owner gate).