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Jan12

Termination/Vaction Payout In Tennessee

In May 2012, you stated that “Tennessee employers are not required to payout unused vacation upon termination, unless they have such a policy or established past practice in place.” http://www.humanresourceblog.com/2012/05/20/vacationtermination-tennessee/

This directly contradicts two previous answers where you state Tennessee employers must pay for unused vacation upon termination:

http://www.humanresourceblog.com/2008/12/31/no-vacation-policy-payable-after-termination/

http://www.humanresourceblog.com/2010/03/31/vacation-payout-upon-termination/

Do Tennessee employers have to pay employees for unused vacation at termination?

In Tennessee, the law specifically states “employers are not required to provide employees with vacation benefits either paid or unpaid (TN Code 50-2-103(3)). If an employer chooses to provide such benefits, it must comply with the terms of its established policy or employment contracts (TN Code 50-2-103(3)). “

“An employer may lawfully establish a policy or enter into a contract denying employees payment for accrued vacation leave upon separation from employment (TN Atty Gen. Opinion No. 06-169)”.

“An employer may also lawfully establish a policy or enter into a contract disqualifying an employee from payment of accrued vacation upon separation from employment if they fail to comply with specific requirements, such as giving two weeks’ notice or being employed as of a specific date of the year (TN Atty Gen. Opinion No. 06-169)”.

“An employer is required to pay accrued vacation to an employee upon separation from employment if its policy or contract requires it (TN Atty Gen. Opinion No. 06-169)”.

“An employer is not required to pay accrued vacation leave upon separation from employment if the employer’s established policy or employment contract is silent on the matter (TN Atty Gen. Opinion No. 06-169)”.

In addition, an employer in Tennessee “may cap the amount of vacation leave an employee may accrue over time (TN Atty Gen. Opinion No. 06-169)”.

“And an employer may implement a “use-it-or-lose-it” policy requiring employee to use their leave by a set date or lose it (TN Atty Gen. Opinion No. 06-169)”.

This entry was posted on Saturday, January 12th, 2013 at 9:30 am and is filed under
Human Resources Management.
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