When a business closes down, do they have to pay employees their PTO?

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When a business closes down, do they have to pay employees their PTO?

Asked on November 27, 2012 under Employment Labor Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Your state has no laws requiring the pay out of unused PTO on termination of employment, so unless an employee has an employment contract requiring that this be paid out when employment ends, the employer would not have to pay it. (If there is such a contract, its obligations are enforceable.) Furtheremore, as a practical matter, if the business were a corporation or LLC, then even if it were obligated to pay, the employees could only look to recover the money from the company itself, not its owners--and its very likely that a company which closes down will have no money to pay this.


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