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Accrued vacation
Benefits & Compensation
Accrued vacation
Exchange ideas about health plans, retirement, work/life benefits, and employee assistance.
I can't find anything that states if accrued vacation is owed to an employee if he gets layed off before the vacation becomes earned or he hits his anniversary date?
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Forums » Topic Forums » Benefits & Compensation » Accrued vacation
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Accrued vacation
posted at 10/31/2008 4:38 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
What state are you in? Many just require the employer to follow their company policy but some states required it to be paid out if it has been earned. And some states don't allow "use it or lose it by the end of the year" policies.
So if you provide a state, I could help more. |
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Accrued vacation
posted at 10/31/2008 5:10 AM EDT
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Posts: 2146
First: 2/15/2006 Last: 9/14/2011 |
My resources show "If an employee receives vacation pay under an employer's policy, vacation pay has the same status as earned wages and must be paid upon termination. An employer must pay any earned but unpaid vacation of a terminated employee in full on or before either the next day after a demand on which the employee would regularly be paid on or a day not more than two weeks after the day on which the demand is made, whichever is earlier."
Based on what you posted, the vacation is earned but not yet usable under your employer's policy. Therefore, if I am reading this correctly, it would be payable at termination. If the employer wanted to make it nonpayable, it would have to be accrued/earned as of the anniversary date or the date it is actually able to be used. For example, on the employee's 1st anniversary, they earn 1 week's vacation time. NOT they earn 1 day for every 2 months they work....but can't use it until after their anniversary. |
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Accrued vacation
posted at 10/31/2008 6:46 AM EDT
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Posts: 3870
First: 2/12/2002 Last: 11/2/2009 |
Essentially yes. If your policy states that a vacation entitlement amount of XX days is granted at a set date, eg 1st anniversary of employment, that vacation amount is not accruing. In some states in which the distinction is made between accrued vacation and lump sum awards, if the employee terminates prior to award date, no prorated amount of vacation need be paid out because it has not yet been earned. However, unused vacation which has been awarded may need to be paid out.
Check your state laws/regulation on payout of vaction. |
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Accrued vacation
posted at 11/3/2008 7:25 AM EST
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Posts: 237
First: 7/10/2007 Last: 8/31/2011 |
That's accrued vacation, which may or may not be accessable to the employee at the time of separation. Again, as others have stated, if your state laws don't require payment upon termination then your company policy is the determining factor. |
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