New York PTO Payout Laws 2025: When Unused Vacation Must Be Paid
Does New York require PTO payout when you quit or get fired? Learn how NY treats unused vacation based on written employer policy and what to check in your handbook.
New York labor laws are often considered some of the most protective in the country, but when it comes to Paid Time Off (PTO) for vacation, the rules are nuanced. Unlike California, where accrued vacation is always treated as earned wages, New York places a heavy emphasis on the written policy of the employer.
Does New York Require Paid Vacation?
No. New York State does not legally require employers to provide paid vacation time or holiday pay. However, if an employer chooses to offer vacation time, they must adhere to the terms of their own established policy.
Important: New York does require Paid Sick Leave for many employers, which is separate from optional vacation time.
New York Paid Sick Leave (PSL)
Since 2020, New York has mandated sick leave based on employer size:
- 0-4 employees (Net income <$1M): Unpaid sick leave (40 hours).
- 0-4 employees (Net income >$1M): Paid sick leave (40 hours).
- 5-99 employees: Paid sick leave (40 hours).
- 100+ employees: Paid sick leave (56 hours).
Accrual for PSL is typically 1 hour for every 30 hours worked.
Vacation Payout Laws in NY
One of the most common questions is: “Does my employer have to pay me for unused vacation time when I quit?”
In New York, the answer is: It depends on the written policy.
- The General Rule: If an employer has no written policy stating that you forfeit unused time, they must pay it out.
- The Exception: An employer can legally refuse to pay out unused vacation time if they have a clear, written policy (e.g., in an employee handbook) stating that “accrued but unused vacation time is forfeited upon separation.”
Employees should have acknowledged this policy in writing for it to be strictly enforceable.
“Use It or Lose It” Policies
Employers in New York are allowed to implement “Use It or Lose It” policies, where employees must use their vacation time by a certain date (usually end of year) or forfeit it. This is legal as long as employees are given prior notice of the policy.
Accrual Caps
Employers can also place caps on how much time you can accrue. Once you hit the cap, you stop earning more time until you use some. This is a standard practice to limit liability.
Summary Checklist for Employees
| Policy | NY Law Status |
|---|---|
| Mandatory Vacation | ❌ No |
| Mandatory Sick Leave | ✅ Yes (Size dependent) |
| Payout on Termination | ⚠️ Depends on written policy |
| “Use it or lose it” | ✅ Allowed (with notice) |
How to Calculate Your Accrual
If you work in NY and earn 1 hour of sick leave for every 30 hours worked (the state standard for PSL):
Example:
- You worked 40 hours a week for 4 weeks (160 hours).
160 / 30 = 5.33 hoursof sick leave accrued.
Check your specific numbers with our Hourly PTO Calculator.
Related
Disclaimer: This guide is for informational purposes only and does not constitute legal advice. Always consult the New York State Department of Labor or a qualified attorney for specific legal questions.