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Pay for Accrued Vacation in Nevada

My son was terminated w/o cause from a firm in Nevada and was told he was not eligible for his vacation pay because the company “just changed its policy.” No memo was sent to employees and other employees leaving the company before him did receive their vacation pay. What action can he take?

Nevada has no law that requires employers to pay workers for vacation time upon termination, according to the Nevada Office of the Labor Commissioner.

If a Nevada employer has a written policy that employees are entitled to vacation pay upon termination, an employee may be able to take the employer to small claims court and collect. It’s going to be more difficult if the employer doesn’t have such a policy in writing, but has paid other workers in similar circumstances.

If an employee genuinely thinks that he has been deprived of a benefit due to illegal discrimination, he should report that to the EEOC. They enforce federal laws that prohibit discrimination based on race, color, sex, religion, national origin, age (over 40) or pregnancy. It is illegal for these factors to be a factor in any employment decision, including payment of earned vacation.

There are a number of states that have statutes on the books that require employers to pay workers for any earned but unused vacation upon termination. These include California, Illinois, Louisiana, Maine, Massachusetts, Oregon, Rhode Island, Tennessee, North Dakota and Colorado.

Other states will enforce the employer’s written policy on vacations. Still other states presume that it is the employer’s policy to pay for earned vacation upon termination, unless the employer specifically has a different policy in writing.

In Maryland, after years of the Department of Labor ruling that vacation pay was not “earned wages,” the court recently decided that they are. It’s not clear if this ruling will apply to every employer in the state yet.

This entry was posted on Saturday, April 26th, 2008 at 7:45 pm and is filed under
Benefits, Termination.
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4 Responses to “Pay for Accrued Vacation in Nevada”

  1. Gary Says:

    We are a Nevada employer. Can we have our PTO payout upon termination policy state that we reserve the right to not pay it out upon termination, or do we have to be 100% consistent and either always pay PTO out or never pay PTO out upon termination?

  2. Caitlin Says:

    Hi Gary! First of all, your question mentions PTO but in most cases employers are required to pay only the portion of PTO that corresponds to vacation.

    There is no Nevada law that you must pay vacation at termination. However, to avoid illegal discrimination, you need to establish a consistent policy. For example, you might have a policy that you will not pay vacation to employees who are terminated for cause. Or, that you will pay vacation only if the employee is laid off, or works a two week notice.
    A problem arises when you have an inconsistent policy. If you pay vacation to Tina but not Joe, simply because you like her better, Joe can sue you for illegal discrimination based on sex, and win. Or, he can file a complaint with the EEOC and they will sue you on his behalf. So you need a consisten policy or a valid business reason for the decision. HTH, and thanks for reading the blogs!~ Caitlin

  3. Dan Says:

    In a ruling the Ninth Circuit Court issued an opinion that accrued unpaid vacation constitutes ‘backpay’ and as such is payable upon termination of employment.
    While Nevada law is silent on the issue this ruling makes it probable that an employee seeking payment for accrued vacation time that has not been take would prevail in a lawsuit. The ruling involved the Sands casino in Las Vegas.

  4. hrlady Says:

    Thanks for the info, Dan!

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