HR

How does PTO rollover work? Can I cap the number of days rolled over?

At the end of the year, many employees still have unused PTO time. When that happens, you can choose to let employees roll over or carry forward some or all of that time into the next year in addition to the PTO they’ll get in the new year.

Do I have to let employees roll over accrued PTO?

It depends on if your state allows or forbids “use it or lose it” policies.

  • If your state allows “use it or lose it” policies, then then no, you do not have to let employees roll over accrued PTO.
  • If your state does not allow “use it or lose it” policies, then yes, you have to let employees roll over accrued PTO.

Alternatively, you can offer to pay out unused PTO you can at the end of the year to limit the number of vacation days an employee can take in the following year.

Since these laws differ from state-to-state, be sure to check your state’s Department of Labor website.

Can I cap the number of PTO days an employee rolls over?

Yes, you can cap the number of days an employee can rollover, except in states that forbid use it or lose it policies.

In those states, businesses must allow employees to roll over all unused vacation days. Since PTO can be used for vacation days, it’s considered the same. In that case, employers must allow the full rollover of any unused PTO time.

Heads up: This article provides general information but it’s not legal advice. Please consult an HR expert or employment attorney for specific guidance on your business and situation.

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