Accrued Vacation???

Shari Turner

Our policy states that full time employees are granted annual vacations with pay based upon length of service. After one full year of service 10 days per year (we have let employees take 5 days after 6 months of employment). If an employee terminates before year end is this vacation time accrued and must be paid based on the employees time in employment?

Jane Reddin AZ

You can define your accrual any way you want, so you just need to look at your own policy. If your policy requires one full year of service before ANY vacation is accrued, then you would not need to pro-rate the payout. In your example of giving 5 days after six months, what if the employee quit the next day? Would you consider them to OWE you that time, or have they earned it under your policy? The key is, you get to define this however you want. If your policy is not clear one way or the other, you should modify it so that it is.

Good luck!
Jane

Roberta

I am not sure what state you work in, but in IL, lacking any sort of formal employment or union CONTRACT, whatever time is accrued to the point of termination is payable. When I worked for a former employer, we found out the "hard" way. An employee filed a claim with the department of labor for her accrued vacation time and our policy was to not grant vacation time until an employee had worked FULL TIME for a year. Consequently, the employer had to pay the accrued time to the employee and was told to do so on subsequent terminations. Fortunately, it was not retroactive although I'm not sure why not. Obviously, it had never been an issue before then, but the employer was certainly out of compliance.