Human Resource Blog

Nevada Vacation

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In Nevada, is an employer required to pay workers for accrued vacation upon termination? If not, how can an employer change the company policy on vacation pay?

There are many states where there is no law requiring employers to pay accrued vacation time to terminated workers. Nevada is one of them.

So it is possible for a company in Nevada to change its policy to deny accrued vacation time to employees who are terminated. It is strongly advised that an employer issue a memo long before the effective date, announcing the change. The best plan is to have employees sign the memo showing that they have read and understood it.

When the policy is in place, it should be in writing and enforced consistently and uniformly. Applying it selectively could result in charges of discrimination. Employees may accuse the firm of discrimination based on national origin, religion, disability, sex, age, color, or race, for example.

The law varies from state to state, and in Maryland the subject of accrued vacation pay has become a topic of controversy. The Maryland Department of Labor says on its website that accrued vacation pay does not count as wages. It does not require payment. But an August 2007 court decision (Catapult technology, LTD, v. Wolfe, in Maryland Court of Appeals) determined that the pay is covered under minimum wage laws and should be paid.

Company polices on this issue also vary.

For example, some firms have plants or offices in more than one state, and sometimes in both states with and without laws requiring payment of accrued vacation time on termination. Some companies will pay accrued vacation time to all its terminated workers in the interests of uniformity. Some will follow state law in each case, paying it where required and denying it where it is not mandated.

Some companies pay it to workers who are laid off or who voluntarily resign and give at least 2 weeks notice, while denying it to those who re fired for any reason.

And other companies will pay it to all their employees, except the ones fired for what is called “gross negligence,” such as stealing from the firm. JH