Is accrued paid time off the same as wages? 

April 17 – Pennsylvania State Representative Mary Jo Daley from Montgomery County in PA has introduced legislation that would ban “Use it or Lose it” policies for paid time off in the state. 

In many jobs in PA, employees can accrue paid time off throughout the year. Some businesses have policies that if PTO is not used by a certain time frame, it’s lost. The employee can no longer take the leave or get paid for it. 

Daley is pointing to other states, like California, Montana and Nebraska, that have laws that require employees to be paid the time owed them, even if they are terminated or leave the company. 

Attorney Clint Barkdoll said, “Some of these other states are saying that’s illegal because once you’ve earned those days off, that’s just like wages.” 

It’s hard to say what the PA House, Senate and Governor Josh Shapiro would do with such a bill. 

Barkdoll said, “Obviously this is something that employers need to watch very carefully because if this passed, it would create a major change in the way employers and employees have to treat unused sick and personal time.”

Pat Ryan of NewsTalk 103.7FM said, “I think this is a good idea. It’s like gift cards. You can’t put an expiration date on gift cards. I invested my time. I played by the rules. Just because the calendar year flips over doesn’t mean I should use it, especially since, okay, maybe you are lower on staff, and I’ve decided that all right I’ll stay along here because it’s a busy season here and then you’re going to penalize me because of that policy.”

Barkdoll added, “Over the years I’ve heard this complaint from workers all the time. They’re getting into November in December, and they’ll say I’ve accrued 10 days of personal and sick time, but I can’t use it. I’m so busy. I can’t afford to take the days off, but yet they’ve earned those days. Now some employers will give them a 50% payout for those unused days so they don’t totally disappear in that respect. But I do think that there’s merit to this and I also hear what she’s saying that from these other states, I could see a scenario where a court says those earned days off are essentially wages and the employer can’t just strip those away from you, because you didn’t use them. There’s where I think from a legal standpoint, this kind of a law could really have some merit and some traction.”