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Jun08

Vacation payout

If a company has a policy manual that states accrued vacation will be paid out if resignation is given with notice, but then puts out a new policy that does not state either way. And there is a pattern of paying out vacation earned if notice is given. Can the company not pay someone that resigns after the new manual their earned vacation if they resign and give formal notice?

The U.S. Department of Labor does not require payment for time not worked, such as vacations. These types of benefits, like vacation, are a matter of agreement between an employer and employee.

Generally, if a person accrues and earns vacation (depending on state) accrued earned vacation time will be paid out upon termination.

A policy manual, is considered a matter of agreement but will usually have a disqualifying statement to the effect that the employer has the right to modify or change the provisions at any time, and/or state the policy manual is not an implied contract. As long as those statements appear in the policy manual, the employer can change the policy at any time.

Past practice (pattern) usually will only hold up with a contract, but that would be vaguely disputed. So yes, your employer can change the practice of payout for vacation for someone who resigns. State laws regarding what constitutes payment at termination may apply.

This entry was posted on Friday, June 8th, 2012 at 10:26 am and is filed under
Human Resources Management.
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