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Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 18808
Experience:  Employment/Labor Law Litigation
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Can an employer use employee PTO time to pay outstanding debt?

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Can an employer use employee PTO time to pay outstanding debt? The company gave us a 60 day letter of layoffs and told us we would receive accrued vacation pay + severance per written policy. We then receive a letter stating that they are carefully evaluating its debts and assets and will not be paying out PTO or severance until that assessment is complete. We live in an "employment at will' state, if that makes any difference.
Hello, my name is XXXXX XXXXX I look forward to assisting you today. I bring nearly 20 years of experience in various legal disciplines.

Your state doesn't dictate that vacation is owed at termination, but rather, that it is a matter of contractual right.

A contract can be written or it can come about by implied means. Now, if you have a lay off agreement that states that vacation will be paid out, that can be considered an implied contract and you can attempt to sue on that basis. The language of that lay off agreement would matter though. The more contractual it appears, meaning both sides give up something and there is agreement, then more power it will have to be an implied contract. You might to look to see if there are written company policies that also state that vacation is paid out at termination.

Unfortunately, this isn't a situation where I can say "yes, they have to pay it to you" because your state's laws are not strict on that topic. You'll have to address this through a court based on that lay off letter and other policies that the company may have.

You might consider small claims court, which has a limit of $5000 to save you the expense and time of regular state court.
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