Vacation Benefits

kkrumm · July 2001

Is there a federal or state law for NJ that covers vacation time earned by an employee that is terminated. Is awarded vacation time considered earned income?here's the senerio, 10 days of vacation are awarded after 6 months of consecutive of employment as a full time employee. Is there any law that states that an employee has a right to this unused "earned vacation" after being terminated.

thank you,

Please feel free to reply to [email]kevinkrumm@yahoo.com[/email]

Margaret Morford · July 2001

The US Supreme Court ruled that accrued, but unused vacation must be paid to an employee that terminates. "Accrued" is the key. Based on the facts that you outlined, if the employee has been with you 6 months, any part of those 10 days he/she has not used should be paid to them. You might want to consider changing your vacation policy to allow employees to accrue a percentage of that time each month and not be able to use it for their first 90 to 120 days of work. Hope that helps.

Margaret Morford
theHRedge

joyce · August 2001

Our union contracts have a clause that state if the employee does not give 2 weeks notice of their intent to resign that they forfeit any accrued time. Based on the above response, is this legal?

jbnunzio · August 2001

We actually just had legal counsel review the exact same policy. We were informed that it is okay to have such a policy. In our company, each employee signs off on the policy stating that they understand its contents. Therefore, we were told that we are in our rights as long as we inform the employee upon hire.
We are located in PA, but check your state as well because it is my understanding that some courts are still debating whether or not you can have your employees forfeit time that they have already earned. Another grey area in HR, can you believe it?

Vacation Benefits

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