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In the U.S., do you get paid for vacation days untaken when you leave a job?

  • I got paid for vacation days untaken when my company was bought out by another company, and then again when they decided to switch from a system where you accrue vacation days to one where it was only "with your manager's approval". – user296 Jan 20 '11 at 22:19

11 Answers 11

13

There seems to be a lot of speculation here. How about a few concrete sources?

From the U.S. Department of Labor:

The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee's representative).

From the Missouri Department of Labor & Industrial Relations:

Employers are not required to provide vacation pay, holiday pay, or severance pay — these are benefits given at an employer’s discretion. The exception would be instances where an employer has entered into a contract where certain benefits are established by agreement.

From the New York Department of Labor:

Q: Must an employer pay workers for holidays, sick time and/or vacations?

A: Under the New York State Labor Law, payment for time not actually worked is not required unless the employer has established a policy to grant such pay. Holidays, sick time and/or vacations fall under 'time not worked.' When an employer does decide to create a benefit policy, that employer is free to impose any conditions they choose.

From the California Department of Industrial Relations:

There is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time. However, if an employer does have an established policy, practice, or agreement to provide paid vacation, then certain restrictions are placed on the employer as to how it fulfills its obligation to provide vacation pay. Under California law, earned vacation time is considered wages, and vacation time is earned, or vests, as labor is performed. [...] And, unless otherwise stipulated by a collective bargaining agreement, upon termination of employment all earned and unused vacation must be paid to the employee at his or her final rate of pay.

  • Illinois requires unused vacation to be paid.
  • Nevada does not require it to be paid.
  • Massachusetts says vacation is not required, but if offered, may be considered wages.

You can find most states' policies by searching for something like Missouri vacation laws.

As you see, the standards vary. The federal government doesn't require employers to pay vacation at all, but states may make more specific laws about it. In my personal experience, most employers do pay out unused vacation (except perhaps in the case of a firing), but the fact that they do so doesn't necessarily indicate that they're legally required to.

11

The legal requirements for this vary by state but most states do require that employers pay for any unused paid vacation time upon leaving your job.

  • 1
    Having been laid off from (now defunct) tech startups several times, this has been the case for me. Before I became self-employed, I made it a point to always carry the max amount of vacation time so that when layoff-time came around (and it always did) there was a little extra bonus in the severance check... – bstpierre Aug 5 '10 at 0:40
  • 6
    Of course, that requires your tech startup to be solvent. :) – user296 Jan 18 '11 at 16:52
10

In my experience, I have been paid for the full amount of the accrued vacation. I would expect that from any employer; it is just as much a part of my compensation as my salary is.

The alternative is that I use all my vacation before leaving (and thus get paid for it) -- so just pay me for it.

8

It depends on the employer. I don't think they are legally required to pay you for unused vacation days, but many companies do.

In my company, the policy is that you can get paid for up to 10 days of unused vacation if you have already accrued it, but it also clearly states that the company has the right to not pay it out at their own discretion.

  • 2
    What is your location? Our law firm made a giant point of telling us we MUST pay out vacation if we have a defined vacation plan immediately upon termination or when someone leaves. – Michael Pryor Jan 17 '11 at 7:47
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    @Michael Pryor - We are in Texas. To be accurate, the policy states that you get up to 10 days paid out if you have accrued it UNLESS you got terminated for misconduct. Perhaps you are good if your defined vacation plan explicitly states your right to not pay it out? Or maybe it is just a Texas thing. It is a pretty employer-friendly state. – JohnFx Jan 17 '11 at 16:28
  • @Michael Pryor, here's what the New York State Dept of Labor says about paying out vacation: Wages and Hours – Kyralessa Jul 22 '11 at 0:30
5

I have always gotten paid for all of my unused vacation days when I left a job at my hourly rate. I have always lost any unused sick days, however. You should check your employee handbook or vacation policy, though. The last job I left also wouldn't let me use any sick time after I gave my notice. So you should definitely get familiar with your company's policies and plan ahead, if you can. Good luck!

3

My company does allow you to get paid for vacation days when you leave, but I also know of people that only receive a percentage of pay for vacation days.

3

Yes and no. Some companies do pay it all out or only a set amount. I have had to fight with employers in the past over this. Sick leave, on the other hand, almost never gets paid out. I took a leave of absence for a year one time and kept all my sick leave. Now I have over 100 hours and it keeps accumulating. I'll probably never use it, but it is nice that its there.

1

Yes. I cashed out unused vacation when leaving my last job. The lump sum increased my withholdings rate, but I get the extra back as soon as I can file income taxes. In fact, sometimes employers will mandate employees take vacation as a way of reducing liabilities on the books, since stuff owed to employees can be more senior than bondholders and shareholders.

  • Employee claims are not necessarily ahead of bondholder claims during bankruptcy. Depends on whether the bondholder claims are secured vs. unsecured. Refer to law.cornell.edu/uscode/11/507.html under (b) – Chris W. Rea Jan 17 '11 at 14:40
  • Thank you for the clarification. It's still a liability, and should be paid out before shareholders, so there's still plenty of reason to "improve the numbers". – jldugger Jan 17 '11 at 18:29
1

It depends entirely on your company and your contract.

A previous employer of mine cashed out all unused vacation at the end of every year, and at termination.

My current employer has a "use it or lose it" policy (which means every December is a mad scramble for people to "use it").

Check with your HR department to find out what your employer's policy is.

1

Legally, other answers have this question covered.

In my experience, this generally breaks down a few ways:

  • Employers who offer "PTO" that covers all forms of leave -- they pay out, up to a limit that they publish in their employee manual.
  • Employers who offer specific vacation, sick leave and personal time usually only pay out for vacation leave, up to some pre-specified limit.
1

I left a job last year and had about 3 days built up. I gave notice, and then learned that they wouldn't be paying it out before I left. I emailed my boss on Friday afternoon and told him I was taking my three days off and would be back on Thursday. :)