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Vacation Pay Upon Termination

Looking for policies on paying out unused vacation at termination. This would depend on the vacation policy itself. (Are vacations granted during first year of employment or only upon completion of a year of service.) Andhow are vacation years counted? - based on anniversary date or something else.

Thanks,

If you simply wish to fax a copy of your polic that would be fine! (might be easier than typing out a response.

Pamela A. Brosch, CPA Chief Financial Officer HSR Business to Business Inc.

Vacation time accrues over the period of time that qualifies for earning it. Some employers require that vacation time cannot be actually taken until completion of one year of service, and after completion of one year's service a week or more of vacation time is then available to the employee. Said vacation actually was earned during the first year, and said vacation time began accruing from day one of employment. Therefore, if an employee should be terminated after 6 months, whatever vacation time has accrued up to date of termination must be paid upon termination.

Each employer should have a written vacation policy, i.e. how much vacation is earned tied to years of service, and can have some restrictions as to when vacation may be taken (such during the seasonal slow times, or coinciding with company-wide closures such as between Christmas and New Year's, for example). Employers can even choose not to offer paid vacations. Whatever the policy is, accrued (earned) vacation time is not up to the discretion of the employer, and always must be paid upon termination.

-- Valerie Sexton Buzzsaw Advertising & Design

I think the law says that with vacation pay, you are required to pay out any unused vacation pay but not sick or personal leave, unless your policy specifically states otherwise. We pay out unused vacation pay and don't pay out sick leave.

We accrue 4 hours per month in personal time (sick leave)on a yearly basis. Whatever is not used is lost. Personal time can only be used for sick days, doctor appointmens, sick children, etc... not for "planned" time off.

Vacation is accrued at 6.6 hours per month (two weeks) for the first three years of employment. You are eligible to take off one week after 6 months of employment. After 3 years, we accrue at 10 hours per month (3 weeks), and after 5 years at 13.34 per month (4 weeks). The hours begin accruing in the first month of employment and are increased on their anniversary date to the 3 and/or 5 weeks. By accruing monthly, we avoid the problems of awarding vacation after one full year of employment as most people need to take time off during that year, and at any given time we can tell exactly how much time is earned. I keep track on a weekly basis, so if an employee is accruing too much time, I will let them know to take time off or risk losing hours. We don't allow more than their allotted time to be accrued longer than a year, so basically, if they don't use time off, they would lose it. That has never been a problem in the 7 years I have been with the company.

Robin Scully Design & Image Communications, Inc.

Pam -

Employees are on 90 days "probation". They can take vacation any time after that. Our vacation is determined by calendar year, with 1st year of employment being pro-rated. We pay all unused vacation out upon termination/voluntary departure.

Diane

Diane Smith Business Manager Donaldson Makoski Inc. http://www.donaldsonmakoski.com

Does anyone have a "use it or lose it" policy toward annual vacation time? For those who do not, do you find employees taking disruptively long vacations?

Michael Gold Goldforest

We have a "use it or lose it" annual policy on vacation. Sick Leave is carried over from year to year. None of our employees abuse vacation or sick leave, and vacation time off must be approved by a supervisor.

Marellie Littlefield Director, Accounting & Human Resources Littlefield, Inc.

We state in our policy manual that up to 10 days (80 hours) can be transferred to the following year. Anything above that amount that wasn't used in the current year is lost. This alleviates the potential for a "super-long" vacation by any employee.

-- Kay Rosburg, Vice President Dever Designs, Inc.

Regarding employees losing accrued vacation time - that is not legal. You can have a policy that vacation time stops accruing if a certain amount of time has been accrued and not taken. Our policy states that vacation time may be accrued for a maximum two years. Employees who have not taken vacations for two consecutive years may not accrue additional vacation time until the firs year's vacation has been used.

-- Valerie Sexton Buzzsaw Advertising & Design

Although from your domain you don't appear to be here, be aware that in California (and probably some other states) such policies are illegal. You can stop accruing additional time once XX (your choice) hours are accrued, but you can't take away any time once it has been earned.

Since most employers have a policy of pre-approving vacation time and can reject anything too long, length isn't generally a problem. But most places I've worked full-time, if an employee wanted a longer vacation for some special reason the employer is ok as long as the employee gives sufficient notice and works to avoid any problems, i.e. making sure someone else is up on what they are doing. Odds are if someone walks in and says "I want a 4-week vacation starting next Monday" that employee has other issues anyway.

Brent A. Byrd C&P Consultant

We are on the PTO system of time off and as such, do not allow our employees to move PTO time forward.... we do not allow more than 15 days (or whatever they qualify for) to be used in one year....unless for medical or personal hardship purposes. If there is maternity leave or surgery of some sort...they could plan ahead and stock PTO time....We also offer to pay for unused PTO time...for now, it is at a rate equal to pay rather than pay and a half or something like that...we also require advance notice for pto requests of more than one day and ask that not more than one week be taken at a time...there are situations that would change that rule like maternity, surgery or prolonged illness of self or loved one etc....

Caitilin Ashley & Associates, Inc.

We do. We want to encourage our employees to use their vacation time vs. being reimbursed in any other way. No one has complained about the policy.

Best Regards, Steve Deiters Creative Department (of America)

Vacation time and sick time are not controlled by the Federal Government. This is usually controlled by the State. The only items that the Federal Government will become involved in is overtime after 40 hours per week.

We have a use it or lose it policy on vacation time and sick time. In the state of Florida, you do not have to offer any benefits of any type. It is a "Right to work State".

Wendy Lokan Accounting Manager/Human Resources Manager RV Brandau Marketing, Inc.

Thanks to all of you for your input on this. I think from the responses generated, that there are probably state laws to consider in this regard, and I'm going to have to ask our attorney what the deal is in Florida.

But for the record let me say that we also encourage our employees to take their vacations. What are we doing if we can't take some time off and clear our minds a couple of times a year?

Michael Gold Goldforest Please visit our Web site: http://www.goldforest.com

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