Labor Laws on Vacation Pay

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Many employers offer vacation pay to employees after they have worked for a certain period of time. Employees can use vacation time to take time off without losing pay. Although there are no laws requiring employers to offer this benefit, any employer who does so must honor his agreement with employees.

Employer Policies

  • Employers must put their policy regarding vacation pay in writing and must apply the policy to all employees equally. For example, an employer cannot have a policy that requires some workers to work for 18 months prior to taking vacation and other workers to work for only 12 months.

Rollovers

  • State laws vary as to whether employers may require employees to take all their vacation by a certain date or lose it. In some states, such as California, employers who offer vacation pay must allow unused days to roll over into the next year, while in other states employers have the right to take away unused vacation days at the end of the year.

Termination

  • Some states, such as California, require employers to compensate employees for unused vacation days when the employee stops working for the company. In these states it does not matter who terminated employment and whether the employee did anything wrong; the employer must compensate the employee just like he must give the employee her final paycheck. In other states, the employee does not have to be compensated and simply loses unused vacation days when she terminates employment.

Protected Leave

  • Regardless of whether an employer offers employees vacation time, she must allow employees to take time off for medical issues in accordance with the Family Medical Leave Act. In addition, employees must be allowed to take time off for jury duty, voting and military leave. If an employer offers vacation time, she can require employees to use vacation time prior to using FMLA time.

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