In Louisiana, an intermediate appeals court held that unused and accrued paid days off should be considered as earned "wages" for which a former employee is due upon separation from the company under the Louisiana Wage Payment Act.

In November, an employee resigned from her position and was not paid the remaining balance of her PTO earned wages. Shortly after quitting, she brought suit demanding she be paid the balance in full for her accrued but unused paid days off. The LWPA has a requirement of prompt payment of earned wages upon resignation or termination. Unused vacation hours are also included in an employees earned wages. The company argued that it was a "mere gratuity" they provided to the employees. The Louisiana First Circuit Court of Appeals disagreed saying that company policy stated that employees were entitled to paid days off due to the "accrual" at a specific rate. Therefore, stating that it is a "mere gratuity" to their employees does not hold. The Appeals Court also noted "accrued but unused vacation time is a vested right for which an employee must be compensated or paid upon discharge or resignation."

Although this is not a surprise ruling, all employers need to analyze their PTO policies to prevent unintended consequences.