We are a California based company with 12 employees and are growing. Our PTO policy is intended to support the diversity of our employees. Following a 90 probation period we acrue 16.67 PTO hours per month. We do not observe any holidays and there are no designated sick days. For those who have not passed their 90 day introductory period, but use PTO that has not been acrued and have terminated employment will have this time deducted from their final paycheck. Is that legal? Are there any other requirements or guidelines that we should be aware of? Please refer me to any documents that might help us determine whether or not we are in compliance. Rita Risser's Response: This is not an easy question! You may be able to deduct advanced PTO from the final paycheck IF the employee signs an agreement in advance to that effect. What is confusing is the precedent that states that an employer can deduct the amounts due on an installment basis but cannot have a balloon payment deducted from the final check. I recommend, therefore, that for non-exempt (hourly) employees you simply not pay them for that time (that is the purpose of waiting 90 days, after all) and then "gift" them with the PTO after 90 days if you want. With exempt (salaried) employees, be aware that you cannot dock their pay for less than a day's increment (e.g. if they have a doctor's appointment, you cannot deduct 4 hours from their pay, but if they are out a day, you can deduct a day). In California, employees who accrue vacation time must be paid the amount accrued and not used when they leave. If your PTO can be used for vacation, you must pay out the entire amount accrued. Therefore, some employers are distinguishing between vacation and PTO. You can still give the unused PTO as a bonus or gift if it is not used. You asked about resources. The best book around is actually used by the Labor Commission. It is written by attorney Richard Simmons and is called Wage and Hour Manual for California Employers. You can order it from Castle Publications, 818-708-3208. Disclaimer: This information is provided with the understanding that the author and publisher are not engaged in rendering legal or other professional services. The publishers disclaim any liability, loss or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this information. This information is not a substitute for the advice of a competent legal or other professional person. You are encouraged to subscribe, link, pass along to others, and/or reprint these articles/pages electronically or on paper, as long as the following credit line is used: © Copyright 1997-2002, Fair Measures, www.FairMeasures.com. For more information about Fair Measures please contact us at: Fair Measures, P.O. Box 2146, Santa Cruz, CA, 95063, 831-458-0500, 800-458-2778, FAX 831-458-0181, info@fairmeasures.com © Copyright 1997-2002 by Fair Measures. All rights reserved. Read our Privacy Policy. To back-page, Use your browser BACK button