When your household employee – whether a nanny, housekeeper, senior caregiver or other – leaves your employment many states require that you pay out her earned but unused vacation time. Generally, it doesn’t matter if the separation of employment is voluntary or involuntary. If you have a separate bank for sick time, that is excluded from the payout. PTO days are treated the same as vacation days in terms of employment law, so they would also be payable to the employee where indicated below.
The states that require the payout upon separation of earned but unused vacation time are: Alabama, Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon, Pennsylvania, Rhode Island (after one year of service), South Carolina, Tennessee, Texas, Utah, Vermont, Virginia, Washington, West Virginia, Wyoming and the District of Columbia.
The following states have no explicit instructions regarding the pay of earned but unused vacation time at time of separation: Florida, Georgia, Missouri, New Mexico, South Dakota, and Wisconsin.
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