Taking unpaid leave when PTO is still available

Q         Our company has a paid time off (PTO) policy entitling employees to paid vacation and sick leave. When they request time off, can they choose to use unpaid leave instead if they still have a PTO balance?

A   Subject to state law, you have the discretion to allow an employee to take unpaid leave rather than using an available PTO balance.

That being said, it’s more typical to consider an unpaid leave only after an employee has exhausted all available PTO. Otherwise, she might take an unpaid leave and then ask to use her PTO balance to extend the leave, or take additional time off that wasn’t anticipated.

Also, accrued PTO is often treated as a wage under state law that is paid out upon separation. By allowing an employee to take an unpaid leave when paid leave is otherwise available, a company will be maintaining a liability on its books and may end up paying out the balance upon separation.

Mark Wiletsky is a partner in and the practice group leader of Holland & Hart LLP’s labor and employment practice group. Mark practices out of the firm’s Boulder, Colorado, office and may be reached at mbwiletsky@hollandhart.com.