Does Your State Have a Law That Bans Use-It-Or-Lose-It for PTO?

Alabama allows use-it-or-lose-it for vacation time and sick leave.

Employers in Alabama do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Alabama statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Alaska allows use-it-or-lose-it for vacation time and sick leave.

Employers in Alaska do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Alaska statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Arizona allows use-it-or-lose-it for vacation.

Employers in Arizona do not have to provide their employees with paid or unpaid vacation time. If an employer does choose to provide vacation time, it must comply with the terms of its own policy or employment contract.

This means that use-it-or-lose-it for vacation time is legal in Arizona, provided that employees have been made aware of the policy as part of their employment agreement.

Arizona prohibits use-it-or-lose-it for sick leave.

Arizona's mandatory paid sick leave law requires employers to grant 1 hour of paid sick leave for every 30 hours worked. Employers with 15 or more employees must grant paid sick leave that accrues up to 40 hours, while employers with less than 15 employees accrue up to 24 hours.

Under the law, unused earned paid sick leave automatically carries over from one year to the next. ⁠Employers can choose instead to pay employees for unused earned leave at the end of a year, so long as they provide an amount of earned paid sick leave that meets or exceeds the requirements of the law, that is available for immediate use at the beginning of the subsequent year. ⁠ ⁠

Employers can implement their own paid time off (PTO) policies, so long as they include sick leave that is equal to or more generous than the minimum established by the law. However, the other conditions of the law still apply, including carryover of unused sick leave.

The law does exempt employers from having to pay out unused earned sick leave at "termination, resignation, retirement or other separation from employment". But it does not allow forfeiture of unused earned sick leave by a particular date.

Therefore, employers in Arizona are prohibited from implementing use-it-or-lose-it for sick leave, unless they pay out unused earned sick leave at the end of the year.

Arkansas allows use-it-or-lose-it for vacation time and sick leave.

Employers in Arkansas do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Arkansas statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

California prohibits use-it-or-lose-it for vacation time.⁠

California labor law considers vacation pay to be a form of wages which vests as it is earned. This means that a policy that provides for the forfeiture of vacation pay that is not used by a specified date (AKA "use-it-or-lose-it") is considered an illegal policy under the law.

California prohibits use-it-or-lose-it for sick leave.

California's paid sick leave law requires all employers to grant 1 hour of earned paid sick leave for every 30 hours of work. Under the law, unused accrued sick time automatically carries over from year to year.

The law allows employers to implement their own PTO policy. However, the policy must satisfy all of the requirements of the law, including carryover. Employers who choose to front-load an employee's full amount of sick leave do not have to have an accrual or carryover policy.

Sick leave or PTO policies that existed prior to January 1, 2015 are "grandfathered" in, and are not required to include carryover. However, any modification to a grandfathered sick leave or PTO policy nullifies its qualification, and the full requirements of the law (including carryover) will then apply.

Colorado prohibits use-it-or-lose-it for any accrued paid leave, including vacation and sick leave. 

⁠Employers in Colorado do not have to provide their employees with paid or unpaid time off. If they do, however, vacation time is protected under the Colorado Wage Act (CWA), and the Colorado supreme court has ruled that any agreement calling for forfeitures of earned vacation pay is void.

The Colorado Department of Labor and Employment (CDLE) has since revised their rules to clarify that the wage protection policy applies to any paid leave that's accrued and made available to use at an employee's discretion. ⁠ ⁠

In addition, paid sick leave is required under Colorado's Healthy Families & Workplaces Act (HFWA). Following the Colorado supreme court ruling, the CDLE issued a revision which states that employees must be allowed to carry over up to 48 hours of unused sick leave from one year to the next. Even if an employer has its own PTO policy, they must comply with these carryover requirements.

Connecticut allows use-it-or-lose-it for vacation time.

Use-it-or-lose-it for vacation time is not specifically addressed by Connecticut law, but state statute does clarify that employers have to provide a written statement of employment policies and practices, including vacation pay. In addition, the law firm Pullman & Comley says that in their experience, "the Department of Labor will construe ambiguities in vacation pay policies in favor of the employee."

All told, this effectively means that although use-it-or-lose-it for vacation time is allowed in Connecticut, employers should be very careful to include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Connecticut probably prohibits use-it-or-lose-it for sick leave, though it's not fully clear.

The state of Connecticut requires all employers with 50 or more employees to grant 1 hour of accrued paid sick leave per 40 hours of work to service workers, up to 40 hours per year. As part of the law, service workers must be allowed to carry over up to 40 hours of unused paid sick leave from one year to the next. "Service workers" includes 69 job classifications, from Food Service Managers to Miscellaneous Office and Administrative Support Workers.

When an employer has their own sick leave policy, the stance of the Connecticut Department of Labor is to apply the more generous policy. An exception would be if an employer front-loads an employee's full amount of sick leave at the beginning of the year. This implies that an employer must comply with the carryover requirements in the state's paid sick leave law, even in their own sick leave policy.

In sum, any employer with 50 or more employees who have workers that fall into the "service worker" classification are most likely prohibited from enacting use-it-or-lose-it for sick leave.

Delaware allows use-it-or-lose-it for vacation time and sick leave.

Employers in Delaware do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Delaware statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

The District of Columbia allows use-it-or-lose-it for vacation time.

⁠⁠Employers in the District of Columbia (Washington, D.C.) do not have to provide their employees with paid or unpaid vacation. If an employer does choose to provide vacation leave, it must comply with the terms of its own policy or employment contract. 

⁠This effectively means that employers are likely free to implement a “use-it-or-lose-it” policy for vacation time. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

The District of Columbia may prohibit use-it-or-lose-it for sick leave, though it's not fully clear.

Washington, D.C. requires all employers with 25 or more employees to grant accrued paid sick leave to their employees. The law also states that employers must carry over all unused sick leave from one year to the next. However, neither D.C. statute nor case law have specifically addressed whether this mandated carryover applies to employers with their own paid leave policy. 

According to the Act: ⁠ ⁠"(b) The terms and conditions of an employer’s policy shall be presumed equivalent if they allow an employee to:

(1) Access and accrue paid leave at least at the same rate as or greater than the hours of paid leave provided in § 32-531.02(a)(1), (2), and (3); and

(2) Use the paid leave for the same purposes as those set forth in § 32-531.02(b), including unscheduled leave."

At the very least, employers who choose to implement use-it-or-lose-it for their own sick leave policy should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Florida allows use-it-or-lose-it for vacation time and sick leave.

Employers in Florida do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Florida statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Georgia allows use-it-or-lose-it for vacation time and sick leave.

Employers in Georgia do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Georgia statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Hawaii allows use-it-or-lose-it for vacation time and sick leave.

Employers in Hawaii do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Hawaii statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Idaho allows use-it-or-lose-it for vacation time and sick leave.

Employers in Idaho do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Idaho statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Illinois allows use-it-or-lose-it for vacation under certain conditions, and allows it for sick leave.

According to the Illinois Department of Labor, employers may implement use-it-or-lose-it policies for vacation time provided two conditions are met:

1. That they allow their employees "reasonable opportunity" to use their vacation time
2. That the employee has been given notice of the use-it-or-lose-it policy

Employers are not allowed to change their vacation policy in such a way that would require employees to forfeit vacation time they have already accrued.

Use-it-or-lose-it for sick leave is not currently addressed by Illinois statute or case law. This effectively means that employers are free to implement a use-it-or-lose-it policy for sick leave. To be safe, employers should follow the same guidelines as for vacation time.

Use-it-or-lose-it will be allowed for paid leave accrued under the Paid Leave for All Workers Act, under certain conditions.

Illinois' new Paid Leave for All Workers Act will take effect on January 1, 2024. Under the act, most employees in the state will accrue 1 hour of paid leave for every 40 hours worked, up to 40 hours of leave per 12-month period. This leave may be used for any reason.

If an employer chooses the accrual system for this mandated general paid leave, they must allow employees to carry over all unused paid leave from one 12-month period to the next. 

However, if an employer chooses to front-load the 40 hours of paid leave at the beginning of the 12-month period, unused paid leave will not be carried over. Under a front-loading system, employers are explicitly allowed to enforce use-it-or-lose-it policies.

Indiana allows use-it-or-lose-it for vacation time and sick leave.

Employers in Indiana do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Indiana statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Iowa allows use-it-or-lose-it for vacation time and sick leave.

Employers in Iowa do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Iowa statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Kansas allows use-it-or-lose-it for vacation and sick leave.

Employers in Kansas do not have to provide their employees with paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with the terms of its own PTO policy or employment contract.

According to the Kansas Department of Labor, vacation time is not considered wages and is not subject to the state's wage payment laws. Additionally, Kansas case law has found that an employer policy which clearly states that vacation leave not taken by a specific date will be lost, is enforceable. State statute and case law do not specifically address use-it-or-lose-it for sick leave.

This effectively means that employers are free to implement a “use-it-or-lose-it” policy for paid vacation and sick leave. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Kentucky allows use-it-or-lose-it for vacation time and sick leave.

Employers in Kentucky do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Kentucky statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Louisiana allows use-it-or-lose-it for vacation and sick leave.

Employers in Louisiana do not have to provide their employees with paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with the terms of its own PTO policy or employment contract.

According to the Louisiana Wage Payment Act, accrued vacation pay is considered a wage and must be paid at employment separation. However, the Louisiana supreme court has specifically ruled that a "use it or lose it" vacation policy is "not illegal".

State statute and case law do not specifically address use-it-or-lose-it for sick leave.

This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation and sick sick leave. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Maine allows use-it-or-lose-it for vacation, under certain circumstances.

Maine's Earned Paid Leave Law (EPLL) requires that most employers with more than ten employees grant 1 hour of paid leave for every 40 hours worked, up to 40 hours per year. Employees who accrue paid leave under the law can carry over up to 40 hours from one year to the next, unless their employer front-loads all 40 hours at the beginning of the year.

Employers are allowed to implement their own vacation policies, provided that they allow an employee to use up to 40 hours of paid leave per year for any reason. If an employer has a separate vacation policy, they are allowed to implement use-it-or-lose-it by a specific date for vacation time.

Maine allows use-it-or-lose-it for sick leave, with important clarifications.

Employers in Maine are allowed to maintain separate policies for different types of paid leave. However, employers with more than ten employees must always grant at least 40 hours of paid leave per year which can be used for any reason, including illness. Leave that is accrued under a policy that exists to meet the Earned Paid Leave Law requirement must carry over up to 40 hours from one year to the next.

For example, if an employer has a separate vacation policy that grants leave which can only be used for vacation, they must also have an Earned Paid Leave policy. If an employee uses only 20 hours of leave accrued under the Earned Paid Leave policy, they will carry over 20 hours to the next year and after 40 hours of work will have 21 hours of earned paid leave available.

However, employers may implement their own policy if it meets the minimum requirements of the law:

• Up to 40 hours of paid leave are available for use per year;
• Leave may be taken for any reason; 
• No more than 4 weeks of notice are required for a planned employee absence; 
• The employee may take the leave, with only the amount of notice feasible under the circumstances, in the event of an emergency, illness, or sudden necessity; 
• Leave can be used for emergency, illness, or sudden necessity even when a policy restricts scheduling leave during certain times to prevent undue hardship to the business

Note that this list does not include carryover requirements. Therefore, an employer does not have to carryover unused earned paid leave if their own policy has these other characteristics.

Maryland allows use-it-or-lose-it for vacation time.

According to Maryland state law, employers may implement vacation policies that do not pay out unused vacation when an employee leaves their company. However, the law only refers to payout at termination of employment. In fact, Maryland state statute and case law do not specifically address use-it-or-lose-it by a particular date, outside the context of employment separation.

Based on this precedent, Michigan employers are likely free to implement a “use-it-or-lose-it” policy for paid vacation time. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Maryland probably prohibits use-it-or-lose-it for sick leave, though it's not fully clear.

The Maryland Healthy Working Families Act (MHWFA) requires most employers to provide 1 hour of paid sick leave for every 30 hours of work paid sick leave. Under the law, employees may carry over up to 40 hours of unused accrued leave. An employer that front-loads an employee's full amount of leave at the beginning of the year does not have to carry over unused leave.

The MHWFA does allow for employers that implement their own leave policy: "If an employer has an existing leave policy that provides leave benefits that are equivalent to or greater than those provided under the earned sick and safe leave law, the employer does not need to provide additional leave."

Additionally, employers in Montgomery County must comply with the county's Earned Sick and Safe Leave Law. The county law allows for carryover of up to 56 hours of leave, with the same provisions as the MHWFA for front-loading and employer's own policies.

Neither the state nor the county law explicitly says whether a policy that accrues sick leave and does not carry over would be considered "equivalent to or greater to" the minimum provisions. However, based on precedent set by other states, it's likely that this is the case.

An employer that does choose to implement use-it-or-lose-it for their own sick leave program should at the very least spell out the terms very clearly in a written PTO policy or employment agreement, and should require written acknowledgement from employees.

Massachusetts allows use-it-or-lose-it for vacation time.

Employers in Massachusetts may implement a “use-it-or-lose-it” policy for paid vacation time, provided they include the terms in their written PTO policy or employment agreement, notify their employees ahead of time, and provide their employees reasonable opportunity to use all of their vacation time.

According to an advisory on vacation policies from the Massachusetts Attorney General’s Fair Labor Division, use-it-or-lose-it for vacation time is acceptable.

However, the AG advises that employers must provide adequate prior notice of the policy and must ensure that employees have a "reasonable opportunity to use the accumulated vacation time within the time limits established by the employer". An employer that doesn't meet these criteria may be vulnerable to a lawsuit for illegal forfeiture of earned wages.

Massachusetts most likely prohibits use-it-or-lose-it for sick leave, but with clarifications.

Under the Massachusetts Earned Sick Time Law, all employers must provide 1 hour of sick leave for every 30 hours of work, and are entitled to carry over up to 40 hours of unused leave accrued under the law. An employer may choose to pay out unused earned sick time at the end of the benefit year instead of allowing carryover, but this is not required.

Section 33.07 of the law allows employers to implement their own sick leave or paid time off policies, "so long as all employees can use at least the same amount of time, for the same purposes, under the same conditions, and with the same job protections."

The law does not explicitly state whether "under the same conditions" includes the carryover rules. However, an FAQ document from the Massachusetts Attorney General's office includes a table which implies that any policy under which an employee is provided earned sick time via accrual must allow for carryover. Given that the law specifically addresses carryover under front-loading and unlimited policies, the omission of an allowance for use-it-or-lose-it may be deliberate. 

All told, use-it-or-lose-it for sick leave is most likely prohibited in Massachusetts, unless an employer front-loads all an employee's sick leave or has an unlimited policy.

Michigan allows use-it-or-lose-it for vacation time.

Employers in Michigan do not have to provide paid or unpaid vacation time. Vacation time is considered a "fringe benefit"; MI Statute 408.473 says that, "An employer shall pay fringe benefits to or on behalf of an employee in accordance with the terms set forth in the written contract or written policy."

Use-it-or-lose-it by a specific date for vacation time is not specifically addressed by Michigan state statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation time. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Michigan most likely prohibits use-it-or-lose-it for sick leave.

Employers in Michigan who employ 50 or more individuals must provide 1 hour of paid sick leave leave for every 35 hours worked. Under the law, employees can carry over up to 40 hours of unused leave from one benefit year to the next. Alternatively, employers can avoid carryover by providing at least 40 hours of leave at the beginning of the benefit year or when the employee becomes eligible.

The law allows employers to implement their own sick leave and PTO policies. An employer is presumed to be in compliance with the paid medical leave act if the employer provides at least 40 hours of paid leave to an eligible employee each benefit year. However, this can be challenged if someone can prove that the paid leave they were given doesn’t actually meet the requirements of the law.

This means that use-it-or-lose-it by a particular date is most likely prohibited for sick leave, because the law requires carryover and any employer-specific policy must meet the requirements of the law. At the very least, employers should include any use-it-or-lose-it terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Minnesota allows use-it-or-lose-it for vacation time.

Employers in Minnesota do not have to provide paid or unpaid vacation time. The state does not require employers to pay employees for accrued PTO, sick or vacation time when they leave their job. Broadly speaking, vacation time is considered a matter of contract between an employer and their employee.

Further, use-it-or-lose-it by a particular date is not specifically addressed for vacation time by Minnesota state statute or case law. This effectively means that employers are likely free to implement a “use-it-or-lose-it” policy for vacation time. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Four Minnesota cities already prohibit use-it-or-lose-it for sick leave, and the state will prohibit it state-wide beginning on January 1, 2024.

Minnesota's new state-level earned sick and safe leave law goes into effect January 1, 2024. The current law, which is in effect until December 31, 2023, does not address use-it-or-lose-it. The new law, however, includes provisions for carryover of unused sick leave. In addition, several Minnesota cities have currently-active sick leave laws which provide for carryover of unused sick leave.

Under the new state law, all employees in the state will accrue 1 hour of sick and safe leave for every 30 hours worked, up to 48 hours. Employees will be allowed to carry over accrued but unused sick and safe leave to the following year. The carryover requirement will apply to employer-specific policies as well.

Employers that front-load ESSL will not have to carryover unused leave. However, if an employer front-loads 48 hours of ESSL, they will have to pay out any accrued ESSL at the end of the year. If an employer front-loads 80 hours of ESSL instead, both payout and carryover will not be required.

In addition to the upcoming state law, four Minnesota cities have their own paid sick leave ordinances which are currently in effect, all of which prohibit use-it-or-lose-it for sick time.

• Employees in the city of Bloomington accrue one hour of sick and safe time (ESST) for every 30 hours worked within the city limits, and may carry over all unused ESST from year-to-year up to 80 hours total at any given time. Employers with their own paid leave policies must still allow for carryover under these same rules. Employers that front-load ESST do not have to allow carryover. 
• Employees in the city of Duluth accrue one hour of sick and safe time (ESST) for every 50 hours worked and may carry over up to 40 hours of unused ESST from year-to-year. Employers with their own paid leave policies must still allow for carryover under these same rules. Employers that front-load at least 40 hours of ESST do not have to allow carryover. 
• Employees in the city of Minneapolis accrue one hour of sick and safe time (ESST) for every 30 hours worked, and may carry over all unused ESST from year-to-year up to 80 hours total at any given time. Employers with their own paid leave policies must still allow for carryover under these same rules. Employers that front-load ESST do not have to allow carryover.
• Employees in the city of Saint Paul accrue one hour of earned sick and safe time (ESST) for every 30 hours worked and may carry over up to 40 hours of unused ESST from year-to-year. Employers that front-load at least 48 hours of ESST during an employee's first year of employment, and at least 80 hours thereafter, do not have to allow carryover. Employers with their own paid leave policies must still allow for carryover under these same rules.

Mississippi allows use-it-or-lose-it for vacation and sick leave.

Employers in Mississippi do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Mississippi statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Missouri allows use-it-or-lose-it for vacation and sick leave.

Employers in Missouri do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Missouri statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Montana prohibits use-it-or-lose-it for vacation time.

⁠⁠Employers in Montana do not have to provide their employees with paid or unpaid vacation time. If an employer does choose to provide vacation, it must comply with the terms of its own PTO policy or employment contract. ⁠

If an employer provides vacation time, however, vacation time that has been earned according to an employer's policy is considered wages and therefore is due and payable in the same manner as regular wages. Furthermore, the Montana supreme court, ruling on a relevant case, has written the following:

"We conclude, however, that once an employee has accrued paid vacation pursuant to the terms of his or her employment contract, an employer may not then impose conditions subsequent which would, if unmet, effectively divest an employee of that accrued vacation."

Together, Montana statute and case law mean that use-it-or-lose-it policies are not allowed for vacation time. This includes use-it-or-lose-it by a particular date, and use-it-or-lose-it at employment separation.

Montana allows use-it-or-lose-it for sick leave.

Unlike vacation time, Montana allows use-it-or-lose-it for sick leave. According to the Montana Department of Labor and Industry, "Private sector employers are not required to pay out severance pay, sick leave or paid time off (PTO). These are considered benefits and may be paid based on the employer’s policies."

The inclusion of "paid time off (PTO)" may seem to contradict other Montana DOLI writings that, "So called ‘use it or lose it’ policies are not permitted in Montana." However, the Supreme Court ruling mentioned above refers to use-it-or-lose-it for vacation time only, and does not mention sick leave.

Nebraska allows use-it-or-lose-it for vacation and sick leave, despite common wisdom to the contrary.

Nebraska is commonly cited as a state that bans use-it-or-lose-it. However, while the state does require vacation payout at separation, Nebraska state statute or case law do not specifically address use-it-or-lose-it by a specific date (e.g. end of year). 

A court case that is commonly cited as a source of Nebraska's use-it-or-lose-it ban is Roseland v. Strategic Staff Mgmt., Inc. However, the case only refers to payout of unused vacation at employment separation; it does not speak to use-it-or-lose-it by a particular date.

This means that employers actually may implement use-it-or-lose-it by a particular date for unused vacation. However, vacation payout at employment separation is required at all times.

Additionally, Nebraska statute specifically says that employers are allowed to provide a sick leave benefit that has no monetary value upon termination. This means that use-it-or-lose-it is allowed for unused sick leave. To be safe, employers should include any use-it-or-lose-it terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Nevada allows use-it-or-lose-it for vacation and sick leave, with important clarifications.

Nevada law requires employers with 50 or more employees to provide at least 0.01923 hours of paid leave for each hour worked (roughly 1 hour of leave for every 52 hours worked). Paid leave accrued under the law carries over to the next benefit year, though employers may cap carryover at 40 hours. Alternatively, employers may front-load an employee's full leave, in which case carryover does not apply.

An employer may implement their own paid time off (PTO) policies, so long as they provide at least 0.01923 hours of paid leave per hour of work. The paid leave law's carryover requirements do not apply to employer-specific PTO policies; the only requirement that must be met is the minimum accrual rate.

Therefore, use-it-or-lose-it policies are allowed for vacation and sick leave, provided that this leave is granted through an employer's own paid time off policy. To be safe, employers that choose to implement use-it-or-lose-it for vacation time, sick leave, or any other PTO policy should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

New Hampshire allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in New Hampshire do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by New Hampshire statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. Employers must inform their employees in writing or by posting of all employment practices and policies concerning paid vacations, holidays, sick leave, personal days, bonuses, pension, severance pay, and payment of the employee’s expenses, and all other fringe benefits as defined by state law.

New Jersey allows use-it-or-lose-it for vacation time.

Employers in New Jersey do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it for vacation time is not specifically addressed by New Jersey state statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

New Jersey prohibits use-it-or-lose-it for earned sick leave, except under certain conditions.

New Jersey's Earned Sick Leave (ESL) Law requires employers of all sizes to grant 1 hour of earned sick leave for every 30 hours worked, up to a maximum of 40 hours per benefit year. Employees are allowed to carry over up to 40 hours of unused ESL, unless their employer chooses to pay out unused ESL at the end of the benefit year.

Employers may comply with the ESL law by implementing their own paid time off (PTO) policies, which can include other leave types (e.g. vacation time). However, the employer's PTO policy must permit employees to use all of the PTO for any of the purposes set forth in the law, and must include the same carryover provisions if PTO accrues instead of being front-loaded.

Alternatively, employers may choose to advance their employees at least 40 hours of sick leave or PTO at the beginning of the benefit year. An employer who front-loads sick leave or PTO in this way is not required to carry over unused ESL to the next benefit year.

New Mexico allows use-it-or-lose-it for vacation time.

Employers in New Mexico do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by New Mexico state statute or case law. This effectively means that employers are likely free to implement a “use-it-or-lose-it” policy. To be safe, employers should include it in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

New Mexico prohibits use-it-or-lose-it for sick leave.

New Mexico's Healthy Workforces Act (HWA) requires employers of all sizes to grant 1 hour of earned paid sick leave (PSL) for every 30 hours worked. There is no cap to how much PSL an employee can accrue. Employers must allow employees to carry over unused paid sick leave from one year to the next, but can cap carryover at 64 hours.

Employers may choose to advance their employees the full 64 hours of paid sick leave at the start of the year. However, front-loading PSL does not relieve an employer from carryover obligations. Further, employers must still track an employee’s hours worked because there is no cap on the number of PSL hours they can accrue.

The law allows employers to implement their own paid time off (PTO) policy which includes other leave types (e.g. vacation time), provided that it incorporates the same requirements of the HWA, including usage, accrual, and carryover. Therefore, employers in New Mexico may not implement a use-it-or-lose-it policy for earned sick leave, even if they have their own sick leave policy.

New York allows use-it-or-lose-it for vacation time, under certain conditions.

Employers in New York do not have to provide their employees with paid or unpaid vacation time. If an employer does choose to provide vacation, it must comply with the terms of its own PTO policy or employment contract.

New York courts have held that employers may implement policies which specify that employees lose accrued benefits or wage supplements (including sick leave and vacation time) under certain conditions. The employer must have told employees, in writing, of the conditions that nullify the benefit.

Therefore, New York employers may implement use-it-or-lose-it for vacation time, provided that they provide written notice of the conditiosn to their employees.

New York allows use-it-or-lose-it for sick leave, but New York City prohibits it.

All employers in the state of New York are required to provide 1 hour of sick leave for every 30 hours worked. Under the state law, unused sick leave carries over from one year to the next, unless an employer front-loads at least 40 hours of leave.

However, New York courts have held that employers may implement policies which specify that employees lose accrued benefits or wage supplements (including sick leave and vacation time). According to the NY Department of Labor, the employer must have told employees, in writing, of the conditions that nullify the benefit.

The city of New York has its own paid sick and safe leave law which applies to employers in the city. Unlike the state law, the city's law requires that employer-specific policies also include the same calculation, usage, carryover rules.

Therefore, employers in the state of New York State are allowed to implement use-it-or-lose-it policies for vacation and sick leave, provided that they give employees prior notice of the policy. Employers in New York City, however, are prohibited from implementing use-it-or-lose-it policies for sick leave.

North Carolina allows use-it-or-lose-it for vacation and sick leave, with clarifications.

Employers in North Carolina do not have to provide their employees with paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with the terms of its own PTO policy or employment contract. ⁠ 

According to the North Carolina Department of Labor, vacation pay (including PTO), sick leave, jury duty pay, and holiday pay are considered "wage benefits". An employer must pay all promised wages, including wage benefits, to its employees based on any policy, agreement or practice that the employer has established. Ambiguous policies and practices will be resolved in favor of employees.

Earned vacation pay, commissions, and bonuses cannot be forfeited unless an employer has a written forfeiture clause in its vacation, commission, or bonus policy or termination policy. This means that use-it-or-lose-it policies are allowed, but employers must post notices in writing of any policy so that employees are fully aware of the policy before their leave expires.

North Dakota allows use-it-or-lose-it for vacation and sick leave, with clarifications.

Employers in North Dakota do not have to provide their employees with paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with the terms of its own PTO policy or employment contract. ⁠ 

According to the North Dakota Department of Labor, earned paid time off must be paid out upon separation except under specific circumstances. However, the state explicitly allows for use-it-or-lose it-policies that require an employee to take vacation by a certain date or lose the PTO, so long as employees are given "reasonable opportunity" to use their time off. Additionally, employers must be able to demonstrate that their employees received notice of the policy.

This means that use-it-or-lose-it policies are allowed, but employers must give their employees "reasonable opportunity" to use all of their paid time off and must be able to demonstrate that their employees received notice of the policy.

Ohio allows use-it-or-lose-it for vacation and sick leave.

According to Ohio labor law, accrued vacation time is considered an earned benefit and employees are entitled to payout of unused vacation upon separation of employment. However, employers can establish a policy of their choosing, provided that they properly notify their employees of the policy. If a contract or policy is silent on the matter, they must pay out unused vacation on separation.

Although PTO may have to be paid out at separation, use-it-or-lose-it by a specific date it is not specifically addressed by Ohio state statute or case law. This means that employers are free to implement a policy that requires employees to forfeit unused PTO if not used by a specific date. However, an employer must include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Oklahoma allows use-it-or-lose-it for vacation and sick leave.

Employers in Oklahoma do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Oklahoma statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Oregon allows use-it-or-lose-it for vacation time.

Employers in Oregon do not have to provide paid or unpaid vacation time. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it for vacation time is not specifically addressed by Oregon statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Oregon prohibits use-it-or-lose-it for sick leave.

Oregon's Paid Sick Leave Law requires employers of all sizes to grant 1 hour of paid sick leave for every 40 hours worked. Employees can carry over up to 40 hours of unused sick leave to the following year.

Alternatively, employers that choose to front-load at least 40 hours of sick leave at the start of the year do not have to carry over unused sick leave. Or, employers may choose to pay out an employee's unused sick leave at the end of the year, so long as the employer credits the employee with the minimum amount of required sick leave on the first day of the following year. 

The law allows employers to implement their own paid time off (PTO) policies which can includes other leave types (e.g. vacation time) in one policy. However, employers must either establish a separate leave policy specifically for the Oregon sick leave law, or bring an existing policy into compliance. To comply, a sick leave or PTO policy must allow employees to carry over at least 40 hours of unused sick leave. 

In addition, the city of Portland requires employers to provide 1 hour of sick time for every 30 hours work. Similar to the state law, unused sick time must be carried over to the next year, though employers can cap carryover at 40 hours. Employers in Portland can implement their own sick leave or PTO policy, so long as it equals or exceeds the requirements set down by the law.

Therefore, employers in Oregon may not implement a use-it-or-lose-it policy for earned sick leave, unless they front-load the full amount of sick leave or pay out unused sick leave at the end of the year.

Pennsylvania allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in Pennsylvania do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Pennsylvania statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Rhode Island allows use-it-or-lose-it for vacation. ⁠

Employers in Rhode Island do not have to provide paid or unpaid vacation time. If an employer does provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Rhode Island statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Rhode Island prohibits use-it-or-lose-it for sick leave.

Rhode Island's mandatory paid sick leave law requires employers to grant 1 hour of paid sick leave for every 35 hours worked. Under the law, unused sick leave carries over to the next year. ⁠

Alternatively, employers can choose to pay employees for unused earned paid sick leave at the end of a year, so long as they provide an amount of earned paid sick leave that meets or exceeds the requirements of the law, that is available for immediate use at the beginning of the subsequent year. ⁠ ⁠

Employers are allowed to implement their own PTO policy, so long as it "provides greater rights or benefits than those provided pursuant to this chapter." Every employer's policy must meet or exceed the minimum requirements established by the law, including sick leave carryover.

This means that employers may not implement use-it-or-lose-it for sick leave, even if they have their own policy that grants more leave than the minimum.

South Carolina allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in South Carolina do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by South Carolina statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

South Dakota allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in South Dakota do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by South Dakota statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Tennessee allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in Tennessee do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Tennessee statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Texas allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in Texas do not have to provide their employees with paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with the terms of its own PTO policy or employment contract.

According to the Texas Workforce Commission, "Payouts of accrued leave are required under the Texas Payday Law only if such a payment is promised by the employer in a written policy or agreement. The payout would be controlled by the wording of the policy or agreement. If no such policy exists, the company would not owe such a payment."

This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Utah allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in Utah do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Utah statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Vermont allows use-it-or-lose-it for vacation time.

Employers in Vermont do not have to provide paid or unpaid vacation time. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it for vacation time is not specifically addressed by Vermont statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Vermont probably allows use-it-or-lose-it for sick leave, under certain conditions.

Vermont's Earned Sick Time Act requires employers of all sizes to grant 1 hour of earned paid sick leave for every 52 hours worked. Unused earned sick time carries over to the next annual period, unless an employer front-loads the full amount of leave at the beginning of the annual period or chooses to pay out an employee's unused sick time instead.

The law allows employers to implement their own paid time off (PTO) policy, which may include other leave types (e.g. vacation time). A policy is compliant if the paid leave accrues and may be used at the same or a greater rate, and for the same reasons, as leave earned under the law.

Carryover is not specifically mentioned as a requirement for a PTO policy to be in compliance. Therefore, employers in Vermont most likely may implement use-it-or-lose-it for sick leave, provided it is part of their own own sick leave or PTO policy and employees are made aware of the terms.

Virginia allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in Virginia do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Virginia statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Washington allows use-it-or-lose-it for vacation time.

Employers in Washington do not have to provide paid or unpaid vacation time. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it for vacation time is not specifically addressed by Washington statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Washington prohibits use-it-or-lose-it for sick leave.

Washington's mandatory paid sick leave law requires employers to grant 1 hour of paid sick leave for every 40 hours worked. Unused paid sick leave up to 40 hours carries over from one accrual year to the next. There is no cap on how much paid sick leave an employee can accrue. Employers can offer a more generous carryover policy, but they must allow for this minimum requirement.

An employer may choose to implement their own sick leave policy, or combine paid sick leave, vacation time, and other leave into a single pool of paid time off (PTO). Any employer policy must meet the same minimum standards set by the mandatory sick leave law, including carryover. Therefore, use-it-or-lose-it for sick leave is prohibited in the state of Washington.

West Virginia allows use-it-or-lose-it for vacation and sick leave.⁠

Employers in West Virginia do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by West Virginia statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Use-it-or-lose-it is allowed for vacation and sick leave.⁠

Employers in Wisconsin do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Use-it-or-lose-it is not specifically addressed by Wisconsin statute or case law. This effectively means that employers are free to implement a “use-it-or-lose-it” policy for vacation or sick leave. To be safe, employers should include the terms in their written PTO policy or employment agreement, and should require written acknowledgement from employees.

Wyoming allows use-it-or-lose-it for vacation and sick leave, under certain conditions.⁠

Employers in Wyoming do not have to provide paid or unpaid time off. If an employer does choose to provide vacation or sick leave, it must comply with its own PTO policy or employment contract. 

Wyoming law explicitly permits vacation policies which provide that unused days at the end of the year are lost, rather than being carried over or paid out. However, employers have to provide their employees full opportunity to use their earned vacation, and may not refuse requests to use it. Use-it-or-lose-it for sick leave is not addressed by state statute or case law, and therefore is permitted.

To be safe, employers should also include the terms of any use-it-or-lose-it policy in their written PTO policy or employment agreement, and should require written acknowledgement from employees.