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Unused PTO in New York: must it be paid out?

Accrued vacation is wages in New York: it must be paid at separation unless the employer gave employees a written forfeiture policy in advance.

The practical question is not whether your employer has a policy — most do — but whether that policy actually forfeits earned time, and whether it was communicated before you earned it.

Statute: N.Y. Lab. Law §§ 191, 198
If fired: Final wages are due no later than the regular payday on which they would have been paid had you stayed employed (Labor Law § 191). New York does not require the employer to pay on the day of discharge.
If you resigned: The same rule applies when you resign: final wages are due on the next regular payday. On request the employer must mail the final pay.
Late-pay penalty: Labor Law § 198: a worker who wins may recover the unpaid wages plus liquidated damages of 100% of the unpaid amount, with interest and attorney's fees. In practice that doubles the exposure on the wage figure alone.
PTO: Accrued vacation is wages in New York: it must be paid at separation unless the employer gave employees a written forfeiture policy in advance.
Small claims limit: $10,000 for an individual
Last verified: 2026-11-03 single source

What to put in the file before you write anything

Your accrual balance on the last day of work, from the payroll system rather than from memory.
The policy in force during your employment, with its effective date — a policy adopted after you accrued time is a weaker defence for the employer.
Whether the policy says "use it or lose it", caps accrual, or is silent. Silence usually favours the employee.
The payout rate: accrued hours are normally paid at your final rate of pay, not at an older, lower rate.

What the letter does that a phone call cannot

A demand letter fixes three things at once: the amount, the date each item was due, and the date the employer was on notice. Every forum that can help you — the New York State Department of Labor — Division of Labor Standards, a small claims judge — starts from those three facts. The letter is built from N.Y. Lab. Law §§ 191, 198 and your own figures, so the deadline it states is the one that applies to your separation, not a generic thirty days.

If the amount fits inside $10,000, small claims court is usually faster than an agency queue; if it does not, the agency route and a demand first is the cheaper path.

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Questions

Does New York law require vacation payout?

Accrued vacation is wages in New York: it must be paid at separation unless the employer gave employees a written forfeiture policy in advance.

Can my employer retroactively cancel my PTO balance in New York?

A forfeiture has to come from a policy that applied while the time was being earned. A policy introduced at separation, or applied only to departing employees, is the weakest version of the argument and is worth challenging in writing.

Other situations in New York

being fired · resigning · a layoff · unpaid commissions · all New York rules

Reviewed 2026-11-03 against the sources listed on the New York page. This is a self-help document tool, not legal advice, and no outcome is guaranteed.