Human Resource Blog

Pennsylvania Vacation

	Benefits
Total Compensation Summary Performance Improvement Plan Performance Appraisal and Review Employee Payroll Status/Change Form Employee Change Form

	Termination
Employee Warning Notice Employee Final Warning Notice Employee Resignation Form Exit Interview Questionnaire Separation Checklist

In Pennsylvania, 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?

Pennsylvania does not have a law on the books which requires employers to pay for accrued vacation time upon termination.

There are several states that do have laws requiring payment of accrued vacation time, but not all of these laws are completely clear.

Take Maryland, for example. The Maryland Department of Labor does not classify accrued vacation pay as wages, so doesn’t mandate it payment. Catapult Technology, LTD v. Wolfe, an August 2007 case of the Maryland Court of Special Appeals, however, ruled that accrued vacation comes under the Maryland minimum wage law, and therefore should be paid.

Company policy in a state without laws mandating pay-out is fairly straightforward to change. The company should decide what changes need to be made and inform all employees in writing, via a letter or memo. The letter or memo should be sent well in advance of the effective date of those changes. Requesting all employees to sign and return the letter or memo will help ensure that all workers receive the information.

There are variations among company policies regarding who receives payment of accrued vacation time.

Some companies pay accrued vacation time to workers who are laid off, but require that workers who resign give two weeks notice to receive payment. Other employers pay all employees, except those fired for gross misconduct.

Businesses with employees in several states have a couple of ways to manage payment for accrued vacation time.

For example, MNO Enterprises pays for accrued vacation time only in states where the law requires it. An employee in a state without such a law would be denied payment of accrued vacation time.

Another company, DEF Incorporated, believes that all of its employees should receive the same benefits. DEF, therefore, pays accrued vacation time to all of its workers, regardless of the state.

Each employer, especially those in states without a law requiring payment, should put its accrued vacation policy in writing. JH