A: No, none of the new sick leave laws currently require employers to pay out unused paid sick leave. However, in some states, such as California and Montana, if an employee accrues rights under company policy to paid time off (PTO) or vacation, the amount becomes payable upon separation from employment.
In these states, employers who have decided to combine their sick leave policies with their vacation or PTO policies would need to pay out accrued time when they part ways with the employee. In other states, such as Oregon and Washington, it’s okay to have a “use-it-or-lose-it” policy for vacation or PTO, even if the sick leave entitlement has been rolled into those policies.
However, as sick leave laws gain traction and provide greater rights for employees, the requirement to pay out sick leave may change in the future. Be sure to stay informed and update your policies as the law changes.