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Michigan Vacation Payout Upon Termination

If a Michigan employer’s written policy does not address whether it will pay out accrued, unused vacation time at termination, does the employer have to pay out accrued, unused vacation time upon termination? I read an article on your site that reads the Michigan employer would have to pay out the vacation time, but I’ve read other articles that indicate if the written policy does not specify the employer will pay out vacation upon termination, it will not be legally obligated to do so. Thank you very much.

Hi Anna,
Per the Michigan Department of Licensing and Regulatory Affairs, an employer is required to pay fringe benefits i.e. vacation pay in accordance with its written contract or written policy. If the company policy has a pay-out provision which states that unused time will be paid to employees at the time of separation, then the employer would be obligated to pay employees for the unused time. The employer would not be legally obligated to pay employees for the unused time if the company policy does not address the issue.

This entry was posted on Tuesday, October 7th, 2014 at 7:47 pm and is filed under
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