Human Resource Blog

Vacation Pay

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Are you supposed to pay out a person their vacation time when they were out on leave and quit the day that their anniversary date was. She would have received 15 days on the day she quit

Probably not. This will depend in part on:

– What state you are in

– What type of leave the employee was on

– How the company vacation policy is worded

Some states do not require that employers pay for unused vacation, at all.

Most companies do not allow employees to accumulate seniority while on paid or unpaid leave.  Suppose Madeline’s anniversary date is June 15. One month before, on May 15, Madeline goes on short-term disability. She returns on June 15. Many companies would require that Madeline work for an additional month, because in this scenario, she has only accumulated 11 months of seniority with the company.

Most companies do not award vacation days on the employee’s anniversary. They award vacation days after “one year of service.” In this case, Madeline hasn’t served (or worked) for one year until July 15. So if she quits on June 15, she is not entitled to payment in lieu of vacation.

Two exceptions to consider.  If the employee’s current leave is FMLA (which is unlikely) she may be entitled to the vacation time. And, some states have laws that will affect this decision.