Mandatory PTO Payout Clause Samples
The Mandatory PTO Payout clause requires employers to compensate employees for any unused paid time off (PTO) when their employment ends. In practice, this means that if an employee resigns, is terminated, or otherwise leaves the company, the employer must calculate the remaining PTO balance and pay the equivalent amount as part of the employee's final paycheck. This clause ensures that employees are fairly compensated for earned benefits and prevents employers from withholding accrued PTO, thereby promoting transparency and fairness in the separation process.
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Mandatory PTO Payout. 1. Employees who have accumulated PTO hours in excess of three hundred and twenty-eight (328) shall receive an annual payout down to three hundred and twenty-eight (328) hours on the first pay date in December.
2. PTO hours will be deducted from the employee’s PTO bank. These hours will be converted to dollars based on the employee’s current hourly rate including any shift differential and subject to all applicable payroll taxes.
3. Employees do not receive pension credit for the hours paid out but will receive pension credit for the compensation value.