Q. Do any state laws govern how to handle unused paid time off when an employee leaves our practice?
A. Paid time off (PTO) typically includes vacation, sick, and personal leave as they apply in your office.
The Texas Workforce Commission says payouts of accrued leave are required under the Texas Payday Law only if you have promised such a payment to your employees in a written policy or agreement. The payout would be controlled by the wording of the policy or agreement. If no such policy exists, you would not owe such a payment.
TMA's Policies and Procedures: A Guide for Medical Practices provides this sample policy for paying for unused PTO:
- A staff member with at least [insert number] days of service is compensated for any unused PTO if the staff member ends employment voluntarily and in good standing because of retirement, relocation to another area, or some other reason unrelated to his or her job performance.
- Staff who end employment with the practice within [insert number] days of being hired are not paid for any accrued PTO.
Published Nov. 10, 2025
TMA Practice E-Tips main page
Last Updated On
November 10, 2025
Originally Published On
March 25, 2015