Human Resource Blog

Virginia Vacation Pay

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Is there any Virginia law that requires employers to pay terminated employees for accrued vacation time?

Most states in America, including Virginia, do not require companies to pay employees for any accrued vacation time upon termination.  State law maintains that employers have the right to establish any type of policy that they so choose in regards to vacation time.  This includes the right to stipulate whether or not workers are entitled to receive payment for accrued vacation upon termination.

The law, however, does not require companies to give benefits, such as vacations, to employees.  If companies have policies stating that employees are to be paid for accrued vacation time, then the law requires that company to honor the policy.  Employee handbooks should contain all of the necessary information in regards to vacation policies.

It is important to mention that employers cannot discriminate in awarding benefits based on criteria such as color, sex, race, pregnancy, religion, age (over 40), national origin, or disability. 

The various state laws regarding vacation pay upon termination can vary a great deal.  There are nine states, including Tennessee, Illinois, Oregon, Rhode Island, Massachusetts, North Carolina, Maine, Louisiana, and California that require employers to compensate workers for accrued vacation time, upon termination.  This rule applies whether an employee is laid off, quits, or is fired.

Oklahoma, as well as a number of other states, has laws that require employers to honor any promises that have been made to employees.  In these states, should an employee handbook state that workers are to be paid for accrued vacation time upon termination, then the policy would be enforced by the state Department of Labor.

Courts in Indiana and North Carolina assume that employees are entitled to accrued vacation pay.  The only exception would be if there was a written policy stating that employees would not receive this type of pay.  Such policies have to spell out the exact circumstances under which the employee will lose his or her vacation pay. JH