Paying accrued vacation time

HRCathy

I had to let an EE go that has worked for us for ten months. EEs receive one week vacation after one year of service. The vacation gets paid on the week of their anniversary. This EE only worked ten months. I feel that he should receive 10 months worth of the accrued vacation, according to IL law, when an employee leaves, we have to pay them all accrued vacation. Since he hasn't worked the full year, do I still pay it? I read the regulation, but it doesn't really specify. If an EE leaves after one year, they accrue their vacation time monthly. I am figuring that once they meet the 90 days, they are entitled to accrue vacation from the hire date. Please let me know if my thinking is correct. Thanks!!

Shadowfax

I'm not familiar with Il law, but keep in mind the distinction between accrued and earned. Accrued is how one earns vacation (1day per mo). Generally, vacation is 'earned' at some other time, as after one year of service ee gets one week vacation. Based on your info I would say you do not technically owe (depending on specific Il law) the vacation time,nor any proration of it. After the first year it sounds like vacation is accrued AND earned at the rate of one day a month, so an ee termed after 15 months would be entitled to 3 days vacation pay (assuming he was paid for the first week on the anniversary of his employment).

HRCathy

I see what you mean. IL TITLE 56 states the "no vacation is earned during a limited period at the commencement of employment. The employer must demonstrate that the provision is not a subterfuge to avoid payment of vacation actually earned by length of service and, in fact, no vacation is implicitly earned or accrued during that period." What is considered limited? It can't be an entire year, can it? My thought is that after a 90 day "break-in" period, they would accrue and earn the vacation hours. The regulation also states that vacation time is earned pro-rata as the employee renders service to the employer.

Shadowfax

As I said, I'm not familiar w/Il law , so I can't help with the limited period. I'm sure the state DOL could probably clarify that for you. I am suprised though at the language about vacation, because in many states there are no regs requiring vacation in any form. The language you mention appears rather specific. All I can say is, it wouldn't surprise me if the regs permit accrual for, say, the first 12 months, and it becomes earned at the anniversary. I'd be interested toknow what you find out!