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Can my employer not pay out my PTOs upon my resignation?

Salt Lake City, UT |

I quit my job without notice, the following is in the Employee Handbook:

"If an employee decides to leave employment with the Company, The company requests at least two
weeks’ notice. Failure to provide notice may lead to forfeiture of accrued, unused PTO, as
determined by the company in its sole discretion."

"Any employee who is discharged by the company shall be paid only wages accrued to the effective date of the separation but no accrued, unused PTO"

The company has continuously cashed out PTOs for employees at their request in the past. Does that qualify PTOs as wages and make them due upon termination?

There is also a precedence where an employees resigned, and filed a complaint against the company, then was awarded his PTOs by the State's Labor Commission

Attorney Answers 1

Posted

The general rule throughout the United States is an employer can set payout policy for PTO upon a voluntary quit. Any exception would need to be in state law. If I recall right, a law was proposed in 2010 which might have impacted PTO in Utah, but I don't believe it passed.

The best source for learning what Utah statute and regulatory law says when you don't have an attorney to research it for you is probably the Utah Labor Commission. Their current web page for Q&A regarding benefits says:

"In general, Utah labor law does not require an employer to provide benefits to its employees. If an employer does establish a policy or practice of providing benefits they are expected to abide by the policy or practice in a non-discriminatory manner." http://laborcommission.utah.gov/FAQ/wages.html#vacation

You indicate that other people quitting this employer have been paid PTO. That seems the most likely argument for you to also be paid your accrued PTO. By refusing to pay you, your employer is obviously abiding by its written policy. The problem is, your employer will never be able to apply its policy in a non-discriminatory manner because the policy itself says it will be applied in a completely discriminatory manner. First of all the policy is that PTO "may" be denied. Second, it's left up to the company's "sole discretion." Those words are reckless in terms of setting policy and basically are begging any Labor Law attorney who reads them to come and sue.

I recommend you contact the Labor Commission and discuss this employer's policy with them.

Labor Commission
PO Box 146600
Salt Lake City, UT
84114-6600
(801) 530-6800
(801) 530-6390
laborcom@utah.gov

You might even consider filing a claim with the Labor Commission.

Wage Claims
PO Box 146630
Salt Lake City, UT
84114-6630
(801) 530-6801
(801) 530-6282
wcu@utah.gov

You could also consult with an attorney who specializes in labor law. However, given the small amount of money we're talking about in your accrued or banked PTO, don't be too surprised if you can't find a labor law attorney who would be willing to go after it for you. Nevertheless, you won't know till you ask. And a consultation might be worth the effort, if for example, the Labor Law attorney believes it's an issue worth pursuing, and, there perhaps is a law which allows for attorneys fees in such cases. (I don't know that there is, but again, it can't hurt to ask.)

Small claims is also an option. But be sure to track down the statute and/or regulation which requires an employer to apply their policy in a non-discriminatory manner. It's unlikely the small claims judge will be familiar with it. Ask the Labor Commission for the citation (which you can then look up on the internet) and anything helpful which they might have on a web page or in writing.

I hope this information helps

Waine Riches

Mark as helpful

7 comments

Waine C Riches

Waine C Riches

Posted

One more thing. The discrimination the Labor Division is talking about is probably the statutory concept of employment discrimination, and not just that a PTO might be paid to someone else, but not to you. It's unequal treatment because race, color, sex (which includes pregnancy and sexual harassment), national origin, disability, age (over 40) or religion. This makes your claim much harder, and now that I think about it, small claims may not be appropriate even though the web page for the Labor Division recommends small claims as one remedy to recover wages. In your case, you may need to prove that denial of your PTO is based on one of the prohibited factors. This is why your first step should be to discuss your situation with the Labor Commission, or an attorney who specializes in labor law. I hope this information helps Waine Riches

Asker

Posted

Hi Waine, Great advice! Thank you. What if I can show that my employer breached the employment agreement in some of its clauses repeatedly? or what if I show that the PTOs count as wages as the employer has always offered to cash them out, and did pay them out to employees while they were employed?. I do suspect that my employed will attempt to dock extra cash from my last paycheck by not paying his share of my health coverage as he always did that with other employees (it is not a written policy). Can I file a claim at that point and have the Commission consider his breach of agreement basis to force him to payout my PTOs in addition to covering my health insurance premiums?

Waine C Riches

Waine C Riches

Posted

The first question I would have is, were the breaches material to any of your claims? If so, and if you file a claim, you would want to inform the Labor Division that your employer had policy which they did not follow. If you can convince the Labor Division that the PTO are actually wages, they should be willing to go after your employer to recover them. But you'll need to make your case. Or if they decline and tell you one of your options is to file in court, you will likewise need to convince the judge that PTOs were wages because they were cashed out. This is an area where if you have the ability, I would advise that you consult with a labor law attorney first, to get a feel for whether an employer must treat each employee the same in the absence of company policy or agreements. So much of what happens in an employment situation is not treating everyone the same. One person gets an office. Another a cubicle. One person earns twice as much as someone else doing the exact same job. One person gets a car or parking spot, another does not. What you are looking for to have the strongest argument possible is policy, or an agreement which the Labor Division or a judge can say is binding against the employer. Based upon the information you tell a labor attorney, they should be able to advise you on where you stand given the pertinent law. As far as payment of benefits without a policy or agreement, and deducting it out of your final wages, Utah does not require payment of benefits. However, if there is a policy or agreement, the employer has to follow it. Unfortunately, you are saying there is no policy. A lot of your case is that the employer has done something for other employees, so the employer should have to do the same for you. A labor law attorney should know if there is any law in the form of an agency regulation, statute, or case, which would support your argument. I wish I could predict the outcome if you do file a claim, but your employer has done its best to avoid specific policy that might be enforced against it. And you haven't mention that you have an agreement which would require payment of PTO, premiums, etc. Consulting with a labor attorney might take you a long way towards understanding the strength or weakness of your case better. I hope this information helps Waine Riches

Asker

Posted

Waine, Man ! I truly appreciate your help. I will definitely consult with a labor lawyer. One last question , then I promise I won't bother you. The employee hand book does state that the company will not pay out PTOs if an employee does not leave a two week notice. It also states that the company will not pay out PTOs if an employee is discharged. Well, the dilemma is that the company has indeed fired employees before when they turned in a notice! They have also not paid another employee his PTOs even though he left a 3 week notice! My problem is that I am on an H1B Visa (Worker's Visa), and I couldn't risk leaving a notice only to be fired in retaliation as that would put me out of status (I have to be continuously employed in order for me to be a legal resident of the country). Not sure if the above info will help. Finally, do you recommend a specific lawyer ? Thanks

Asker

Posted

Oh and yes, the employment agreement states that he shall pay wages the business day before a holiday if the pay period falls on a pay period. He breached that clause all the time by paying the business day afterwards. And if I know him well, he will not pay me during the next pay cycle and he will pay me late as he has done that all the time with employees who left the company.

Waine C Riches

Waine C Riches

Posted

I like the firm of Strindberg and Scholnick http://www.utahjobjustice.com/ I'm not sure what they do in the way of consultation on cases like yours, but in my book they are the best in Utah. They have a long history of community service and care deeply about their clients. Consequently they have had some of the best success in the cases they've taken. Whoever you go to see, be sure to let them know about your visa in addition to everything else you've been telling me. I think it best for whoever you consult with for you to take some time before you call and prepare something in writing which includes everything you've been telling me, plus anything else related to your visa, wages, PTOs, benefits, employment policy, the history of wage payments by your employer, etc. I don't know if your employer has engaged in any pattern and practice type of discrimination against a protected class, but with that kind of information a labor law attorney should be able to judge whether that should be looked into. Also, be sure to take any other written documents that might be related to your issues, such as employment policy, and any other documents pertaining to wages, benefits, PTO, etc. Utah Code 34-28-5 requires wages to be paid on what would have been your next regular payday if you quit. http://le.utah.gov/code/TITLE34/htm/34_28_000500.htm Here's the pertinent part of 34-28-5: 34-28-5. Separation from payroll -- Resignation -- Cessation because of industrial dispute. (2) If an employee does not have a written contract for a definite period and resigns the employee's employment, the wages earned and unpaid together with any deposit held by the employer and properly belonging to the resigned employee for the performance of the employee's employment duties become due and payable on the next regular payday. The Labor Division is charged with enforcing the law. http://le.utah.gov/code/TITLE34/htm/34_28_000900.htm An employer who violates Utah's Payment of Wage statute (Utah Code 34-28-1 through 19) may be subject to criminal penalties under Utah Code 34-28-12. http://le.utah.gov/code/TITLE34/htm/34_28_001200.htm Finally, be aware that not all employers are subject to these statutes: 34-28-1. Public and certain other employments excepted. None of the provisions of this chapter shall apply to the state, or to any county, incorporated city or town, or other political subdivision, or to employers and employees engaged in farm, dairy, agricultural, viticultural or horticultural pursuits or to stock or poultry raising, or to household domestic service, or to any other employment where an agreement exists between employer and employee providing for different terms of payment, except the provisions of Section 34-28-5 shall apply to employers or employees engaged in farm, dairy, agricultural, viticultural, horticultural or stock or poultry raising. I hope this information helps Waine Riches

Asker

Posted

Yes it does. Thanks Waine!

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