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Unpaid Vacation in Texas

If an employee in Texas leaves a job after 7 years, is she entitled to payment for accrued vacation time? Also, she gave 2 weeks notice. The employer terminated her immediately, because she was going to work for a competitor. Must the employer pay her for the two weeks? 

The majority of the U.S. states, including Texas, do not require employers to pay workers for accrued vacation time upon termination.

Under the Texas Payday Law, the employer has the right to establish any policy he or she chooses, regarding the use of vacation time. This would include whether or not employees are entitled to payment for accrued vacation upon termination.

This law does not require that employers give benefits to workers such as vacations. It does require that if an employer has a policy that workers are paid for accrued vacation time, the employer must honor that policy. (Normally vacation policies can be found in employee handbooks.)

The only exception would be if the employer had paid other workers for accrued vacation time, in similar circumstances. In that case, the employer could be accused of discrimination if an employee was not paid for vacation time.

However, if the employer has no history of paying accrued vacation time, then there is no requirement that they must start now.

Several states, including California, Maine and Illinois require that employers compensate workers for any accrued vacation time, upon termination. In general, this is true whether an employee quits, is fired or is laid off. However, Texas is not among these states.

When an employee in Texas gives 2 weeks’ notice, and works that time, the employer must pay the employee for the time he or she actually worked. However, if the employer chooses to terminate the worker immediately, the employer has no legal obligation to pay the worker, for time that is not worked.

Texas is an employment at will state, meaning an employer can terminate a worker at any time, for any reason or for no reason. And, in this case, the employer has no obligation to pay the worker for the two weeks’ notice.

This entry was posted on Wednesday, January 9th, 2008 at 4:50 pm and is filed under
Labor Laws, Termination.
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