Paid Time Off – TX Employment Law

Dustin Paschal here with Simon Paschal PLLC. We’re starting something new this year where we’re going to try to do short little video snippets answering some legal questions regarding employment law, and business law, and we’re going to post those to our YouTube page each week. So this will be the first one and we’ll do them weekly on Friday so you can get used to going and checking them out there. But here at the first the year, one of the main things that we’re doing as attorneys is handbooks, and handbook review, and handbook revision. So we get a lot of questions this time of year about what needs to be in the handbook, what should be in the handbook and whatnot.

One thing in particular that we get asked about a lot is paid time off or PTO. Everyone has different policies regarding PTO, or paid time off, but the one thing to keep in mind is that there is no state or federal law, at least Texas state law, or federal law governing PTO. So there is no requirement as an employer that you give your employees PTO. That said, if you are going to give some sort of PTO to your employees, you need to make sure that you have a policy and that it is in writing. That’s going to help you avoid discrimination claims and keep your managers applying things evenly. One thing to keep in mind though, that when you do put it in writing, according to the state of Texas, you’re now subject to the Texas Payday Act, and those things are going to have to be followed, and if you don’t pay an employee the PTO they’re owed according to your written policy, that is a violation of the Texas Payday Act. So that’s something to keep in mind.

But what should go into a policy for PTO? You need to make sure that you are outlining how an employee accrues PTO, how an employee utilizes PTO. You also need to include, and this is an important one, how an employee’s PTO is handled at separation, whether termination, resignation, retirement, whatever that may be. You do need to outline explicitly how that PTO is addressed upon separation. You’ll also need to address PTO with respect to rollover. Kind of year to year and how that works. Some employers let you carry a lot over, some employers don’t much carry any over. So these are all things to keep in mind when you’re doing your PTO. You need to make sure that each part is addressed and that your employees are well aware of how that PTO works.

So just a small little tip there on paid time off and policies that should go in your handbook. We’ll talk about some other handbook policies in future videos and we’ll talk about a whole bunch of different things in future videos, but there’s a little tip for the day. Thanks!


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