Payouts of accrued leave are required under the Texas Payday Law only if such a payment is promised by the employer in a written policy or agreement. The payout would be controlled by the wording of the policy or agreement. If no such policy exists, the company would not owe such a payment. A sample policy for accrued leave payouts might look something like this:
Unused paid leave is forfeited when an employee separates from employment. However, employees who are laid off for economic reasons, or who resign with at least two weeks' advance written notice, will receive the balance of any unpaid leave remaining at the time of the work separation. Paid or unpaid leave time may not be counted toward such a notice period.
To illustrate, assume that a company has a written policy similar to the above example - on a Wednesday, the employee gives what she says is two weeks' notice ("I'm quitting and taking the final two weeks as vacation"), but admits she's starting a new job on the following Monday. Clearly, that would not be two weeks' notice, since 1) taking a vacation is not the same as working out a notice period and 2) even if she were to work until the new job started, there would not be two weeks of work possible within that time. In such a case, the company could legally deny the accrued leave payout otherwise payable under the written policy.
Under the same policy, an employee who is terminated for any reason other than an economic layoff would have no claim to accrued leave when leaving the company.
For a more detailed policy regarding accrued leave payouts, click here.