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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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I wish to cash out a certain amount of my employers paid time

Customer Question

I wish to cash out a certain amount of my employers paid time off program.
This would be a hardship request to repair my car for transpration to work.
I have no transporation now. And, I cannot borrow money for the repairs
(Chapter 13 ).
I have accrued 402 hours PTO and I would request 200 hours cash out.
Are there any restrictions that you know of ?
My employer says they are restricted by IRS regulations.

-Thank you,
Tom Hein
Submitted: 4 years ago.
Category: California Employment Law
Expert:  Tina replied 4 years ago.
Hello and welcome,

Does the employer have a policy of permitting employees to cash out PTO time as you wish to do?

Customer: replied 4 years ago.


The employer allows a two-week annual cash out and a financial and medical hardship request for cash out.

Expert:  Tina replied 4 years ago.
Thank you for the additional information, Tom

Neither state nor federal law requires employers to provide PTO time or to permit employees to cash out accrued time. Therefore, this issue is not highly regulated at all typically.

While an employer must not discriminate against employees based on a protected status with regard to any term of employment, including this, they are normally free otherwise to set and enforce their own policies with regard to how and when PTO time may be cashed out.

Having said that, they must withhold taxes from such pay, similar to withholding for normal wages, according to state and federal laws and regulations, including IRS regulations. But the employer would not be restricted by IRS regulations from providing this benefit to employees. The IRS regulations would merely dictate how much in federal taxes must be withheld from such pay.

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