Human Resource Blog

Payout of Vacation at Current Rate - Massachusetts

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I am taking a leave of absense and my company has agreed to pay out my accrued vacation time. The thing is that I recently got a raise and they are paying my old rate for the vacation hours accrued before my raise and my new rate for the hours accrued after my raise. Is this right? (They have no written policy on this.)

This is a dilemma and you will want to check with the Massachusetts Department of Workforce Development on your specific situation.

 

Massachusetts employers are required to pay out earned vacation time when an employee is terminated. However, you have not been terminated – you are taking a leave of absence.

If your leave of absence is covered under FMLA, the federal Family and Medical Leave Act, then by law the employer is required to allow you to use your vacation time at your current rate. This is a new regulation implemented in 2008, and some employers may not be aware of it.

However, if your leave of absence is not FMLA, the employer is under no obligation to pay out your vacation time. It’s essentially a gift from the employer. The employer is being generous by paying any amount.

Suppose your Uncle Fred gives you a gift of $500. It would be less than gracious to complain because he didn’t give you $750, instead. That’s essentially the situation you’re in, here.