What is use-it-or-lose-it PTO?

Use-it-or-lose-it policies forfeit any PTO not used by a deadline (usually year-end). **How It Works:** - Employees receive annual PTO allocation - Must use all PTO by December 31 (or anniversary) - Unused time is forfeited **State Legality:** Use-it-or-lose-it is BANNED in: - California (PTO is considered earned wages) - Montana - Nebraska **States With Restrictions:** Some states allow it only if: - Clearly communicated in writing - Employee had reasonable opportunity to use time - Policy was disclosed at hire **Alternatives:** Many employers use softer approaches: - **Carryover caps:** Roll over up to 40 hours - **Grace periods:** Use by March 31 - **Payout option:** Pay out excess over cap - **Donation programs:** Give to coworkers in need **Best Practice:** Even where legal, use-it-or-lose-it can hurt morale. Consider allowing some carryover with a reasonable cap to balance employee wellbeing with liability management.