What PTO gets paid out at termination? In short, it depends on your state.
Many states have laws that require an employer to payout accrued vacation time when an employer is terminated.
However, PTO is often a combo of vacation days, sick leave, and personal time off. How should you separate the accrued vacation days that you’re required to pay out with the accrued sick leave and personal days that you’re not not?
Well, in most cases, you can’t separate vacation, personal and sick time from PTO. You see, employment law tends to view PTO as vacation since, in the end, all PTO time can be used for vacation days. So, if you’re in a state that requires you to pay out vacation, you’ll likely have to pay out all accrued PTO then an employee is terminated.