Fired employee wants to be paid for unused vacation

Jayhawk · July 2004

We have an employee in our Illinois office who was terminated last week. At the time of her termination she had several days of unused vacation left. It states in our company employee handbook that any unused vacation time has no cash value upon termination, whether by resignation or firing.

She is claiming that in Illinois, she is owed all of her unused vacation time plus any vacation time she would have earned for the next year. I have a call into the IL Dept. of Labor, but would like to get other opinions on this as well. Any suggestions?

HR in CA · July 2004

In California we have to pay all accrued but unused vacation and personal time. I have never heard that employers would have to pay out the next year's accrual too.

mwild31 · July 2004

[font size="1" color="#FF0000"]LAST EDITED ON 07-01-04 AT 01:45PM (CST)[/font][br][br]I think she's right, partly. Any vacation balance she has at time of termination/resignation should be paid, however, nothing is due after the termination date. I think you're going to have to change your policy as well - :-? just wondering, did you have an attorney review your policy before setting it up?

"Unless otherwise provided in a collective bargaining agreement, whenever a contract of employment or employment policy provides for paid vacations, and an employee resigns or is terminated without having taken all vacation time earned in accordance with such contract of employment or employment policy, the monetary equivalent of all earned vacation shall be paid to him or her as part of his or her final compensation at his or her final rate of pay and no employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation. (Source: P.A. 83‑199.)"

[url]http://www.legis.state.il.us/legislation/ilcs/ilcs3.asp?ActID=2402&ChapAct=820[/url] ILCS 115/&ChapterID=68&ChapterName=EMPLOYMENT&ActName=Illinois+Wage+Payment+and+Collection+Act%2E

marc · July 2004

Well done Mwild. Your internet search skills are still incredible - I have missed your insight and expertise and am glad you are starting to post again.

mwild31 · July 2004

thanks marc! x:-)

System · July 2004

[b]You go[/b]ogle [b]girl![/b]

Welcome back, mwild.

James Sokolowski
HRhero.com

Shadowfax · July 2004

I don't know about Ca, or Il for that matter, but mwild's post suggests what I have always believed to be the difference in paying out unused vacation or not - and that is the language of the satute saying "...earned vacation..." Hr's post mentions all 'accrued vacation.." I have always understood the difference to be: you must pay all earned PTO but not necessarily accrued PTO. For example, if vacation is accrued at the rate of a day per month, that simply describes how many and how fast you can accumulate the time. But, if the policy says vacation is earned (read vested) at some other time (i.e. on annivesary date) then if ee is fired day before aniversary, no legal reason to pay the vacation. But, if vacation is 'earned' at a day per month, each month produces a day of PTO which must be paid.

Balloonman · July 2004

Our vacation time is not earned, it is awarded on the anniversary date. If they leave for any reason we do not pay it out. I was not here when it was set up, but I am pretty sure that the reason it was set up this was was to avoid having to pay it out.

My $0.02 worth!
DJ The Balloonman

Rockie · July 2004

In South Carolina, if you have a policy that accrued vacation (or PTO) will not be paid out under certain circumstances, then you are covered In the absence of such a policy, we are obliged to pay out the accrued PTO.

In some states, you are are obliged to pay it out regardless of circumstances.

I can't figure out why this person feels they would be entitled to next year's leave????

Fired employee wants to be paid for unused vacation

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