I will be giving my current employer two weeks notice and then starting a job with a new company. In the state of Michigan, is the employer (headquartered in Texas) required to pay out the vacation time I have accrued. They aren’t terminating me, I’m resigning….in case that makes a difference.
Under Michigan law, an employee is entitled to payment for any earned vacation upon termination, unless the employee has specifically agreed to a different policy, in writing.
Michigan does not require employers to give paid vacations, but when they are given, the Michigan Department of Labor and Economic Growth assumes that employees will be paid for earned vacation upon termination. This is true, regardless of whether the employee resigns or is fired.
State law does permit a Michigan employer to set a policy, in writing, that employees will not be paid for earned vacation time upon termination. The employee must agree to the policy in writing. This agreement cannot be coerced – that is, the employee must freely agree in advance, and not sign the policy because they fear retaliation.
In most cases, this policy is in the employee handbook. Most employers have workers sign and return one page of the handbook during the hiring process, which signifies that the worker understands all the policies and agrees to them. If the handbook specifies that the employee will not be paid any earned vacation time upon termination, and the employee signed and returned one page of the handbook, that should satisfy the legal requirement.
Under those circumstances, an employer would not have any obligation to pay workers vacation upon termination.
If there is no such policy in writing, or if employees have not signed a statement that they agree to the policy, then they are entitled to payment for earned vacation upon termination.
If an employer has a history of paying vacation time upon termination regardless of the company policy, then the company probably must pay this employee. Also, withholding vacation pay from a protected group is illegal discrimination.
Because the employee is performing work in Michigan, the laws of that state apply, regardless of where the employer’s main office is located. The Wage and Hour Division of the Michigan Department of Labor & Economic Growth enforces this law.
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