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Is the 3 day rule at termination apply to accrued vacation pay

I have an employee who I laid off today and I will be paying her accrued vacation pay but the issue is being able to afford to pay that within the three days of her last day of work. The catch 22 is that the reason we laid her off was that we are running out of cash reserves. This employee has about 160 hours accrued of vacation pay. I will be paying within the three days her actual earned wages, it is the 160 hours of vacation pay that I could use to spread out over the next two pay periods (4 weeks). We do have a policy that says we will honor paying at termination the accrued vacation pay. So am I breaking the law if I pay the actual worked hours within the three day period and the accrued vacation pay within the next 4 weeks?

The short answer is yes, in most states you are breaking the law if you do not pay this employee for her unused vacation time at termination. If you explain the situation to the employee, that you will pay her within the next 4 weeks due to financial problems, she may be understanding. The penalities for not paying vacation on time would be less than the penalties for not paying vacation at all, in most cases.

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This entry was posted on Thursday, September 16th, 2010 at 8:10 am and is filed under
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3 Responses to “Is the 3 day rule at termination apply to accrued vacation pay”

  1. » Is the 3 day rule at termination apply to accrued vacation pay … « Human Resources 123 Says:

    [...] the rest here: » Is the 3 day rule at termination apply to accrued vacation pay … Comments [...]

  2. Bob Says:

    In regards to Accrued Vacation Pay – Does the 3 day rule @ termination apply in the State of Florida? Thank You & Best Regards

  3. Caitlin Says:

    Hi Bob! Here is the bad news: No, there is no Florida law that an employee must be paid final wages within 3 days.

    Here is the worse news: Even if an employee were owed vacation pay by past practice or written employer policy, there is no mechanism in Florida to collect it. In most states, the state department of labor will collect unpaid wages or vacation pay for an employee. The Florida Agency for Workforce Innovation has no enforcement powers. The employee would have to sue the employer in court, or in small claims court to try to collect. Even then, Florida attorneys report that employees are seldom successful. HTH, and thanks for reading the blogs!~ Caitlin

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