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Vacation Pay

We have an employee who has worked for us from 1/08 until 9/09. Our vacation policy for salaried employees is 80 hours after they serve 1 year. This employee was eligible for 80 hours paid vacation in 1/09.

My understanding has always been you must work full time accruing vacation hours for the following year. So to be eligible for another 80 hours he would need to work full time from 1/09 to 1/10. He had used 48 of his 80 this year leaving 32 hours. He was laid off this week. I say he gets 32 hours vacation on his last check but he seems to think he should also get paid the vacation hours he has accrued from 1/09 to 9/09, 60 hours, making it 92 hours paid vacation. Who is right?

In every state except California, you are. The employee is entitled to payment only for the hours of vacation that he could have used (under company policy) on his last day of work.

There is a difference between accrued vacation and earned vacation. At many companies (like yours) employees accrue vacation time that they have not yet earned and are not eligible to use. There is no need in most states to pay employees for accrued but unearned time. And of course a number of states do not require that employers pay out vacation at termination at all.

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This entry was posted on Friday, September 25th, 2009 at 6:27 pm and is filed under
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