The question of whether an employee can use accrued Paid Time Off (PTO) during their final two-week notice period is a common workplace dilemma. The ability to use that time is highly situational, depending on internal company regulations, external employment laws, and the practical needs of the business during the transition phase. Understanding these different layers of influence is necessary for an employee to make an informed decision when resigning.
The Primary Decider Company Policy
The employee handbook or the written PTO policy is the most important document determining the use of accrued time during a notice period. These internal guidelines outline the rules for requesting and utilizing time off, and some policies contain specific clauses addressing separation. Many companies explicitly prohibit or severely restrict the use of PTO during the notice window, requiring the employee to work the full two weeks for a smooth handover.
A policy may differentiate between general PTO and traditional “vacation time,” which can affect usage and payout. If the policy dictates that all accrued time will be paid out upon separation, the employer may deny the request to use the time off. Instead, the monetary value is included in the final paycheck. The company’s established practice, even if not explicitly written, can also influence how these requests are handled.
State Laws on PTO Payouts
State law can supersede internal company policy, but its primary focus is typically on the required payout of unused PTO rather than the employee’s ability to use the time. States generally fall into two broad categories regarding how they treat accrued paid time off upon separation.
The first category consists of states that consider accrued PTO to be earned wages. In these jurisdictions, the employer cannot implement a “use-it-or-lose-it” policy, and the monetary value of all accrued, unused PTO must be paid out to the employee regardless of the reason for separation.
In the second category of states, PTO is viewed as a benefit rather than an earned wage. Here, the company’s written policy dictates whether the time is paid out or forfeited. If payout is not guaranteed, the employee has a greater motivation to use the time before their final day. However, even in states where payout is required, the law typically only governs the financial settlement and does not grant the employee the right to schedule time off during the notice period.
Managerial Discretion and the Notice Period
Even when company policy or state law permits the use of PTO, a manager retains the right to deny the request based on legitimate operational needs. The two-week notice period is intended to allow for an orderly transition, which often includes completing essential projects, documenting procedures, and training a replacement or a colleague. If the employee’s presence is required to ensure business continuity, the manager can enforce that requirement by denying the PTO request.
This denial is not a punishment but a business decision rooted in the necessity of a smooth handover. Employers may require the departing employee to be present for exit interviews or to assist with the transfer of institutional knowledge. Should an employee attempt to use PTO to cover the entire two-week period, the employer may interpret this action as a failure to provide proper notice and an abandonment of the role. The approval process is a practical gate that must be cleared, regardless of the legal standing of the accrued time itself.
Strategic Options for Unused PTO
Once an employee understands the company policy and the relevant state payout laws, they can pursue several proactive strategies for addressing their unused PTO balance. If the state or company policy mandates a full payout of accrued time, the most straightforward option is simply to request the payout, which provides a lump sum in the final paycheck.
If a payout is not guaranteed, the employee may choose to negotiate a compromise with their manager. This negotiation could involve working the first week of the notice period and then using the second week as paid time off, effectively shortening the time spent in the office.
Another approach is to use the time off before submitting the formal resignation letter, taking the vacation days immediately prior to the start of the two-week notice. This strategy allows the employee to utilize the accrued time without the complexities of the resignation period. The most effective strategy depends on the employee’s financial needs and their goal of maintaining a professional relationship with the departing employer.
Potential Risks of Forcing PTO Use
Attempting to take accrued PTO without receiving official managerial approval during the two-week notice period carries significant professional and financial risks. If an employee decides to unilaterally take the time off, the employer may view this as job abandonment and an immediate termination. This outcome can result in the employment record reflecting an involuntary separation rather than a voluntary resignation.
While termination does not automatically negate the employee’s right to a PTO payout in states that treat it as earned wages, the immediate separation could damage the professional relationship and potentially compromise the quality of future employment references. Furthermore, a defiant departure could result in the employer refusing to pay out accrued benefits in states where company policy permits forfeiture upon voluntary separation or termination for cause. Employees should always prioritize communication and adherence to the company’s request process to protect both their financial interests and their professional reputation.