Indiana treats accrued vacation as earned wages, so an employer must pay out unused, accrued PTO when you leave.
PTO payout in Indiana
Payout at separation
Payout required
Use-it-or-lose-it
Allowed with a clear written policy
The rule
Indiana treats accrued vacation as earned wages, so an employer must pay out unused, accrued PTO when you leave.
How this usually works
PTO payout is governed by state wage law, not federal law. Where a state treats accrued vacation as earned wages, employers must pay it out when you leave. Everywhere else, it comes down to your employer's written policy or contract, and if that policy promises payout, the employer generally has to honor it. A payout is taxed as wages when you receive it. This is general information, not legal advice.