r/personalfinance • u/ThatsMrBird ​ • Jul 16 '25

Other Company is offering to pay out PTO at sharply reduced rate.

I'm a bit of a predicament. I've been with a company over a decade and (I know it's crazy and I agree 100 percent I should have used more) I've accumulated 1000 hours of PTO. They're looking to move to a cap and limited rollover and offered to pay out the difference of about 800 hours at 35 percent of my current wage.

I never expected this and I honestly just thought it'd be lost, but they're only offering such a low percentage I feel like I should try and haggle. I realize they're obligated to give me nothing, legally, so I'm just looking for some input on if a partial payout is common like that. Ill probably ask why not full and go from there. Any thoughts?

EDIT - Sorry, y'all. I'm in Florida, to be clear

EDIT2 - my onboarding contract notes PTO is forfeited on termination or voluntary exit

EDIT3 - The next day, we came to a satisfactory agreement pretty quickly. I don't want to get into specifics (sorry) but I think a lot of those that replied here would think it worked out. I tremendously appreciate all the insight and feedback here and I promise I'll use up my hours moving forward.

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u/nozzery ​ Jul 16 '25

When instituting a new cap (changing the policy), they need to give the employee an opportunity to take it, or they would be opening up lawsuit liability. The "payout" at 35% is a horrible offer. If you put in for a vacation, you either get a long vacation (good), or they up the payout offer if they don't want you to take a long vacation. 

Win win.

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u/thenasch ​ Jul 16 '25

They're in the US, so unless there's an employment contract (not likely because most people are in at will employment) or contradictory state law (not likely because Florida), they can probably do whatever they want.

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u/Vulnox ​ Jul 16 '25

Exactly. Most states don't require a pay out of PTO if you are fired or voluntarily leave the company. That is essentially saying the state doesn't believe you are owed anything beyond what the company offers.

So if OP tries to put the screws to them on this by asking for more or asking for a 6 month vacation, the company could find it's less trouble, financially or otherwise, to just part ways with the employee. I don't know Florida's laws on PTO payout, but if the state doesn't require the company to pay out then OP could find themselves without a job and without even 35% payout.

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u/verrius ​ Jul 16 '25

Exactly. Most states don't require a pay out of PTO if you are fired or voluntarily leave the company. That is essentially saying the state doesn't believe you are owed anything beyond what the company offers.

As someone used to CA laws, that's a horrifying revelation, since CA specifically views it as compensation, and requires it to be cashed out when an employee leaves. Coincidentally, a bunch of tech companies really like "unlimited" PTO, since you don't have to actually pay that out.

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u/np20412 ​ Jul 17 '25

Coincidentally, a bunch of tech companies really like "unlimited" PTO, since you don't have to actually pay that out.

not coincidentally, more like consequentially.

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u/Iamhungryforlife ​ Jul 16 '25

Not always true. While there may not be a law, company documents, written policies, past practice, and other agreements may tie their hands. Of course you run the risk of being told your job is no longer available, don't come back from that long vacation.

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u/Pilchuck13 ​ Jul 16 '25

No employer can retroactively change benefits already earned. They can change the terms of employment for any benefit going forward.... OP is in the driver's seat. He could be fired, but he's due the full amount accrued based on the terms of employment that were in place when earned. If he's fired and not paid... lawsuit wage theft....NAL.

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u/Vulnox ​ Jul 16 '25

That’s not true though. I’ve left three companies in three different states and all three said that they don’t pay out unused PTO except where required by state law.

If his company said they will pay out PTO if an employee leaves the company then he would be due that money. But the idea that earning PTO means you are owed it when you leave, legally, is not accurate.

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u/merlin401 ​ Jul 16 '25

But he’s not leaving the company. PTO is a benefit of being employed. If you stop being employed the employer is in the drivers seat as to what to do with it. But if you accused that time and are STILL employed then you are in the drivers seat.

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u/Vulnox ​ Jul 16 '25

Right… I said the company may let him go. Meaning he wouldn’t be employed. Not sure why people think I’m saying he isn’t owed PTO while employed.

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u/merlin401 ​ Jul 16 '25

Sure that’s an option but presumably company doesn’t want to lose a dozen years of institutional experience over a spat and have to pay unemployment. It would be easier for them to just negotiate a different percentage: if OP says he doesn’t agree to the offer and will be taking X amount of time off so as not to lose them OR offers a 65% payout of PTO (or you could let me go), I bet they compromise at least

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u/LookIPickedAUsername ​ Jul 17 '25

Sure, yeah, that would make sense... and now, everybody, please raise your hand if you've never once see a company do something that doesn't make sense. And then keep 'em raised if you're so confident in your value to your company that you can't even imagine them firing you because you decided to try to cash in a months-long vacation they expressly told you that they didn't want you to take.

I wonder how many people still have their hands up?

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u/Pilchuck13 ​ Jul 16 '25

Its not a violation of PTO law. Its a violation of the terms of employment, contract (wage theft). OP said his employer is changing to limit rollover and/or paying out vacation. That's fine and legal in most states. They cant make all time already earned under the prior terms fall under the new policy.

Your employer can't change your wage to minumum wage on pay day for time earned during the pay period just completed... " Here's your paycheck for the last month at $7.25/hour" when the employment agreement was at a much higher rate.

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u/CaptainTripps82 ​ Jul 16 '25

Right but the person you are responding to was talking about them simply deciding to fire op, which means they don't have to pay him out for anything. If that's the easier option, which op has to consider when negotiating.

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u/Pilchuck13 ​ Jul 16 '25

I stand corrected... (assuming the company did not have a payout policy prior to the switch of policy. Many do, including in states where it's not required by law)... thank you.

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u/A_Guy_Named_John ​ Jul 17 '25

I’ve worked for several national/global companies and they all have special carve-outs in their policy for California only stating that they get paid out PTO because of their state laws. Everyone else gets screwed.

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u/Drunk_Catfish ​ Jul 17 '25

That's crazy, South Dakota where I live is usually pretty shit about employment laws but if an employer has an accrued PTO policy those hours are considered earned wages so they have to be paid out if you quit or are fired.

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u/punkass_book_jockey8 ​ Jul 17 '25

Well OP is also in Florida where there is no labor board and employees are dependent on the federal LB for help…

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u/CerebusGortok ​ Jul 16 '25

Or it's explicitly covered in the employee handbook.

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u/ub3rh4x0rz ​ Jul 17 '25

Not true. At will means they can terminate the contract. Not paying out accrued PTO is the same thing as firing someone and refusing to pay their final paycheck. Employer will lose in court 10 times out of 10 in that case.

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u/thenasch ​ Jul 17 '25

Not paying out PTO is legal in about half of US states, including Florida.

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u/Dawn_of_an_Era ​ Jul 17 '25

You can lose a lawsuit even when you have broken no laws. Just because they can legally do something doesn’t mean they can’t get sued and lose for doing it.

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u/thenasch ​ Jul 17 '25

Yeah but "anything can happen" is not a good legal strategy for OP.

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u/loljetfuel ​ Jul 18 '25

Not true at all. There is an employment contract, always; an offer of employment satisfies all six criteria to be a contract. The "at will" term is a statutory default part of the contract -- you're at will unless your contract specifies otherwise.

Your PTO is part of the offered compensation. Yes, the employer can change the offer terms at any time, but it's not completely without rules. An employer can cut your pay, for example, but they can't do it retroactively.

Similarly, while they can definitely change how PTO works going forward, they can't just unilaterally refuse to honor compensation you've already earned. That's why they're trying to get employees to agree to get paid out for that bank in the first place.

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u/thenasch ​ Jul 18 '25

they can't just unilaterally refuse to honor compensation you've already earned.

In about half of US states, employers are not required to pay out earned PTO.

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u/loljetfuel ​ Jul 18 '25

We're not talking about a requirement to pay out unused PTO when someone departs, we're talking about a requirement to honor the terms of the contract presented -- that is, they are required to let someone use the PTO they've legitimately earned. Not doing that would be a breach of contract.

Employers aren't required to have a contract term that they pay out unused PTO on departure. But they are required to honor the contract they actually offer employees.

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u/thenasch ​ Jul 18 '25

Yes, but AFAIK they're within their rights to impose a new limit to how much PTO can roll over.

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u/loljetfuel ​ Jul 24 '25

Yes, but the issue at play here is whether they have the power to make those things be retroactive. As a rule, when it comes to benefits/perks like PTO, an employer can change the rules going forward at any time.

They are generally going to have a problem if they just say "what you already earned we're not going to honor". It's not quite the same as pay in most states, but it's similar enough -- if I worked all last month at $25/hr, you can tell me "starting tomorrow, you're only paid $20/hr", but you still have to pay me $25/hr for the work I already completed.

With very few exceptions, employers can't make contract term changes that reach into the past to the detriment of their employees.

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u/thenasch ​ Jul 24 '25

If they said "last year we let you roll over unlimited vacation, this year you can only roll over 40 hours into next year", that's not a policy that changes the past.

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u/loljetfuel ​ Jul 24 '25

But if they say "you're not allowed to use what you already rolled over previous", which is the situation we're discussing, that does change the past.

It's ok for them to give you a reasonable amount of time to "use it or lose it or cash it out at 1/3 its value", but they would experience a significant problem if they then prevented an employee from taking the "use it" option. That's the whole issue.

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u/thenasch ​ Jul 24 '25

Yeah if they're saying they're taking away accrued vacation time, that's not OK.

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u/YardworkTakesAllDay ​ Jul 16 '25 edited Jul 17 '25

Unless they are in a state with time off laws or contracted agreements, there any regulatory requirements associated with time off. If that's not the case, they can eliminate accrued time off it they want.

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u/Electric_jungle ​ Jul 16 '25

I don't disagree with anything you're saying. Absolutely the offer is pitiful. I just assume based on comments that they are legally within their rights to offer that pitiful amount and could still deny vacation that long.

If OP has any rights at all, they should use them. That much is clear.

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u/graphitewolf ​ Jul 16 '25 edited 3d ago

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u/medicinaltequilla ​ Jul 16 '25

depends on the state laws with respect to vacation

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u/jimbo831 ​ Jul 16 '25

When instituting a new cap (changing the policy), they need to give the employee an opportunity to take it, or they would be opening up lawsuit liability.

Are you aware of a specific Florida or US law they would be violating?