When it comes to PTO/vacation payouts, does the company have to pay out accrued PTO (paid time off) or vacation pay after the employment ends? I regularly get this question from South Carolina employees who have recently been terminated. The answer: in general, it depends on what the company’s written policy says.
Are PTO/Vacation Payouts Considered “Wages” under the SC Payment of Wages Act?
PTO/vacation payouts may qualify as “wages” under the South Carolina Payment of Wages Act, which is an important consideration when it comes to bringing legal claims against the company. Why? Because lawsuits for unpaid wages can seek treble (triple) damages and attorney’s fees.
The Act defines “wages” as “all amounts at which labor rendered is recompensed, whether the amount is fixed or ascertained on a time, task, piece, or commission basis, or other method of calculating the amount and includes vacation, holiday, and sick leave payments which are due to an employee under any employer policy or employment contract.” S.C. Code Ann. Section 41-10-10.
That bolded language means that if the company’s written policies state that the PTO/vacation time must be paid out when the employee leaves, then that policy will govern, and thus the company must pay it out. And if the company refuses to comply, then a lawsuit against the company for wage theft may be appropriate.
But if the company’s written policy says that the employee forfeits all PTO/vacation payouts upon termination or resignation, then generally speaking, the employee will not be entitled to those payments and would not fall under the Wage Payment Act, absent some other promise or contract.
But What If The Company’s Policies Are Silent as to the PTO Question?
Sometimes the company does not have a written policy that affirmatively says the employee does or does not get the accrued PTO. It’s simply silent as to that question.
In that case, I believe the employee is still entitled to the payment of those wages under the Act, or, at the very least, entitled to payment as part of a contract (legally enforceable promise to pay). Practically speaking, though, the amounts of money at issue in most situations won’t be enough to justify a lawsuit with an attorney’s involvement. A few weeks pay for someone making $50,000 a year just doesn’t make sense to file as a standalone claim. However, if there are other issues to bring in a lawsuit, I could still bring the PTO issue as a separate claim and seek treble damages and attorney’s fees.
For smaller claims involving unpaid final checks or PTO, where only a few hundred or few thousand dollars are at stake, I normally tell employees that they can file a wage complaint with S.C. Dept. of Labor, Licensing, and Regulation and/or can file a small claims/magistrates court lawsuit in their county (for cases involving $7,500 or less).
Takeaways for South Carolina Employees
For most SC employees, the biggest takeaway is to review your company’s written policies on payout of accrued PTO/vacation pay before you leave. If you have a chance to use the PTO first, then do that first (applicable mostly in a situation when you’re resigning, not when you’re being unexpectedly terminated). Otherwise, it becomes an argument between the company and the employee.
If you have specific questions about unpaid PTO/vacation pay, you can reach out to a South Carolina Unpaid Wages Lawyer for a fact-specific consultation.
