An employee was out on PTO for medical reasons. She was out longer than PTO was available but the company paid her anyway. Now that she has returned, they want to make the employee pay back the additional PTO time. Is this allowed? Since they didn’t make this a condition of the unpaid PTO being paid can they make a deduction now? Also, going forward, if someone is out for medical reasons and uses up his/her PTO, should our new company policy be to allow additional time under this circumstance? In other words, what you have done for one person becomes your new policy, correct?
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Thank you for your inquiry regarding an employer that wants to recoup pay for an inadvertent extension of PTO time.
There are no federal or state laws prohibiting your organization from recouping the advanced PTO time from the employee, so absent a collective bargaining agreement or other contract prohibiting you from doing so, you may be able to require her to pay back the time. That said, as a policy matter, since you did not warn the employee that this would be required when she was on the leave, you may want to provide her with the paid time off.
Most organizations in this situation would not have advanced the paid time off at all, or if they did, may have offset it against future PTO. Another alternative, then, could be to treat the paid PTO as advanced time off and offset it against any future PTO the employee earns.
Note that if you do require repayment and want to make deductions from the employee’s pay, you must comply with any state requirements on deductions from pay, which (depending on the state in which you operate) may include having the employee’s specific agreement to the deductions and that the deductions may not take the employee below the minimum wage.
Regarding your policy on the use of PTO, you are correct that you want to try to be consistent in how you apply your policy, and providing this employee with extra paid time off could impact your future policy if you granted the additional paid time off intentionally or if you have granted additional paid time off to other employees.
That said, it also sounds like your organization may not have fully intended to provide the employee with the extra paid time off since it also now wants to have the time paid back. So, arguably, you have not created a new policy simply by granting the extra paid time off to this one employee when you are still debating how to deal with the PTO provided to her.
If the pay for PTO was inadvertent, you may want to document the circumstances. This may provide support for a position that the employee was paid in error, rather than as part of a new policy.
A better approach is now to review the PTO policy and determine how you will react in future cases when an employee has used up their PTO but needs additional time off. Most employers will not provide additional paid time off before it has been accrued and require employees to take the time off as unpaid.