<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=690758617926394&amp;ev=PageView&amp;noscript=1">
The Complete Payroll Blog

Does your vacation and PTO carry over to the New Year?

Posted by Complete Payroll | Dec 13, 2017 7:00:00 AM

Does your vacation and PTO carry over to the New Year_.png

With the end of the calendar year fast approaching, many employers are reminding employees that the company’s policy does not allow for the carryover of unused vacation time or paid time off (PTO) to the next calendar year or that there is a limit on the amount of time that may be carried over from one year to the next. Such limitations on unused vacation or PTO time carry over may be permitted under a state’s wage and hour regulations; however, it is dependent upon individual state regulations.

Click to learn more about HR Support Center

Some states view vacation and PTO as a form of wages and employers are not permitted to establish policies that have a “use it or lose it” clause.  In these states, it is permissible for the employer’s vacation or PTO policies to state that unused time will be carried over from one year to the next, but once a specific maximum number of hours are banked, the accrual of additional time is stopped until the balance drops below this maximum. 

Other state wage and hour regulations permit employers to maintain a “use it or lose it” policy that provides for employers to dictate a specific date by which all vacation time must be used or the time will be forfeited.  In these states, employers may also opt to limit the amount of time that is permitted to be carried over to the next year.

Timely reminders to employees of an employer’s policy regarding carry-over of unused time will not only help prevent employee morale issues related to the loss of unused time, but will also help to reduce the number of employees who are requesting time off at year end.  Keeping your employees apprised of the amount of vacation or PTO time in individual accounts shifts the burden of responsibility from employer to the employee to maintain accountability of tracking vacation or PTO accruals and banks. 

Employers who have questions regarding the compliance of their vacation or PTO policies with individual state regulations should reach out to an HR Professional for review of the company policy. 

Learn more about Complete Payroll's very own HR Support Center.

Topics: Employees, Human resources, Benefits

Written by Complete Payroll

We do payroll, HR, timekeeping and more for employers all over the country from a small, rural town in Upstate New York. And we're constantly publishing articles and other resources to help business owners, HR managers or anyone that helps manage a workforce. Welcome to Payroll Country!

Are you using our free resources?

We're constantly publishing free tools to help with payroll, HR and other administrative objectives.

New call-to-action
New Call-to-action

Subscribe to instant blog email notifications

Recent Posts

General Disclaimer

The materials and information available at this website and included in this blog are for informational purposes only, are not intended for the purpose of providing legal advice, and may not be relied upon as legal advice.  The employees of Complete Payroll are not licensed attorneys. This information and all of the information contained on this website are provided pursuant to and in compliance with federal and state statutes. It does not encompass other regulations that may exist, including, but not limited to, local ordinances. Complete Payroll makes no representations as to the accuracy, completeness, currentness, suitability, or validity of the information on this website and does not adopt any information contained on this website as its own. All information is provided on an as-is basis.  Please consult an attorney to obtain advice with respect to any particular question or issue.