By:  LINDSEY O’NEILL, ESQ.

Wow.. I recently had the most amazing vacation!  The first time in years I took a vacation without checking my work-related emails, or phone calls.  No cell phone, no laptop.  It did me such wonders, that I was able to be more present to my environment when I returned to working with my clients.  I noticed how many folks around me had not taken vacation….   So I did a little Google search and found that since many people are struggling with their finances these days, they’re foregoing vacation due to fears of losing out on important work assignments or possibly even losing their jobs altogether.  Besides, many of us fear that in our absence, someone else will try to take our place. 

Not only did this news sadden me for those poor souls who really need a break, but it also worried me for employers trying to figure out how to comply with wage and hour laws regarding unused vacation time.  Must employees be compensated for unused vacation time?  Can vacation time roll-over to the following year?  Can employers cap the total hours of vacation time that may be accrued? 

Since you are my favorite readers… I figured I’d give you some answers to the above questions!  The answer is…. it depends.  I  know, I know… you hear that a lot when it comes to the law.  But in this case, its very true.  To a large extent, state laws vary regarding vacation compensation due to employees.  Generally, there is no legal mandate to even provide for vacation time or vacation pay – rather it is considered to be a matter of agreement between the employer and the employee.  But there is a catch…  Most state laws provide that once an employer has made an “agreement” with employees to provide vacation time/pay (even sometimes if only by virtue of an employment policy or provision in an employee handbook regarding vacation time/pay),  then state law steps in to govern whether/how that vacation time may accrue, whether it can be cashed out, etc.   I can tell you one thing for sure – violations of wage and hour laws can subject an employer to expensive lawsuits from disgruntled employees.  In this area, as in many employment topics, it pays to have good legal counsel help an employer draft and execute good vacation time and vacation pay policies. 

Click here to learn more about the laws on vacation time and vacation pay in your state:   List of All State Labor Offices