Is there any Arizona law that requires employers to pay terminated employees for accrued vacation time?
No. Most states, and that includes Arizona, have no laws requiring employers to pay their workers for accrued vacation time if the employees are terminated.
Arizona laws generally give employers the right to set the policies they choose in this matter. Vacation time is included in that, and is usually found in employee handbooks. However, keep in mind that if a policy does say that workers will get the accrued vacation time pay, then the employer must honor that policy. But if a company has no history of paying out for accrued time, then there is no obligation to begin.
Employers must be careful about consistency and the risk of discrimination. So if an employer grants accrued time to one worker, he or she must grant the same to all. The law says employers must not discriminate based on sex, color, race, pregnancy, religion, age (over 40), national origin, or disability. If an employer were to pay accrued time to all members of one ethnic group, for example, and not others, the move would be against the law.
There is a great deal of variation between states when it comes to laws regarding termination pay.
There are nine states that do require employers to pay workers for accrued vacation time if those workers are terminated, fired, quit, or laid off. Those states are Illinois, Tennessee, Rhode Island, Oregon, North Carolina, Massachusetts, Louisiana, Maine, and California.
Many states, however, do not have such a law. They include Missouri, Arkansas, and Georgia.
Oklahoma and other states, on the other hand, require employers to honor promises they make to employees, including promises in employee handbooks. If the handbook says, for example, that a worker will be paid for accrued vacation time at termination, then the employer must honor that. Failure to do so will result in enforcement by the state’s Department of Labor.
Finally, there are states, such as North Carolina and Indiana, where courts have assumed that workers are entitled to the accrued pay unless a company’s written policy expressly says otherwise. JH
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