New Jersey Labor Law on Unused Vacation Days
New Jersey employees who lose or leave their jobs may wonder whether they have the right to receive payment for vacation days they have not used. State labor laws mostly leave this decision up to the employer. The state will step in to enforce regulations about unused vacation time only if the employer has established a policy and fails to follow it.
Other People Are Reading
-
The Facts
-
New Jersey's labor department enforces laws concerning the minimum wage and overtime wage rate, but allows employers to decide on policies regarding benefits such as vacation time. Employers that choose to implement a vacation policy may decide on specific guidelines, including whether employees may roll over unused days to the following year or receive compensation for them when their employment ends.
Considerations
-
Employers must be careful to live up to policies they have established regarding issues such as unused vacation time. They must apply such policies across the board and without discrimination. While the New Jersey labor department does not specifically require employers to offer vacation time in general, or to compensate employees for unused days, it will investigate complaints that employees have not received fair treatment in accordance with established company policy. Once an employer establishes a policy, employees have a right to view it as an implied contract.
-
Significance
-
The relevance of policies regarding employees' unused vacation time extends beyond what happens at termination of employment. Employees who receive vacation days and do not use them may want to roll them over to the following year. This practice, known as "banking" vacation days, is permissible only at the discretion of the employer. In other words, employers may institute a use-it-or-lose-it policy regarding vacation time. Employers may worry that allowing employees to roll over unused vacation days would result in an extended loss of manpower.
Comparisons
-
A few states have more favorable laws than New Jersey regarding unused vacation time. California, Montana and Nebraska prohibit any kind of use-it-or-lose-it policies and require employers to pay employees for unused time upon termination. Illinois and Massachusetts likewise require employers to make payments for unused leave upon termination, while Louisiana mandates payment unless a company policy specifically stipulates otherwise. Those states allow some form of use-it-or-lose-it policies, however.
Misconceptions
-
Vacation time throughout the United States is a fringe benefit, not a legal right of employees. New Jersey and other states take their cues from the Fair Labor Standards Act, the most prominent federal law regarding employment and labor. That law is silent on the matter of vacation time, allowing employers to craft their own vacation policies, including what happens with unused days. The U.S. is among a minority of industrialized nations with few or no laws regarding workplace benefits.
-
References
- New Jersey Department of Labor and Workforce Development: Laws and Regulations
- EmploymentLawFirms.com: Vacation and Severance Pay in New Jersey
- EmploymentLawHandbook.com: Vacation Laws
- United States Department of Labor: Work Hours: Vacation Leave
- Legalzoom.com: Employment Law 101: Accounting for Vacation Pay
Resources
- Photo Credit Creatas/Creatas/Getty Images
