Human Resource Blog

Vacation accrual and early termination

We have a policy at our office that vacations can be taken even before the time is earned and then employees basically “pay it back” as they work the required time to earn the advanced days. The employer will pay the employee for the time off even though essentailly not yet earned. In our employement contract this is layed out in detail. It also states that if an employee leave before having worked enough time to have “payed back” or earned the vacation time, the previously paid vacation would be deducted from their final check. Is the deduction legal if its agreed to in the employment contract?? We are in New York City. thx

Yes, this deduction is legal if it is agreed to in writing. Many employers are moving to this type of vacation arrangement because it improves employee morale and provides increased flexibility. The employer is basically loaning the employee money by advancing one weeks salary when the employee takes a week of vacation that has not yet been earned. In New York, if the employee quits, the employer is permitted to recover the amount loaned to the employee as a deduction to the final paycheck.