To pay or not to pay vacation pay?

We had a long-term (11years) employee quit on Monday. She had always been loyal & dependable, but not the hardest worker. She left during the middle of her shift, now she wants her accrued vacation pay. We are located in NC so I don’t believe there is any law that requires us to pay her for the accrued vacation. Our policy states that an employee terminating for any reason is eligible to receive pay for earned vacation provided adequate notice is given. Since she did not give a notice. I see not reason to pay her & not everyone agrees with me. What would you do?


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  • You are correct that there are some states that require you to pay accrued vacation as it is considered something that was earned.

    If your state is not one of these and you have a policy such as what you have described in place, then you are okay.

    The only issue you have is if you have stepped outside of this policy and paid some employees when they did not give proper notice. I believe you should do one or the other. When you start making exceptions to a policy, you could have a case for disparate treatment of employees.

    Just as an aside, there must have been some issue to cause a long term employee to just up and leave in the middle of a shift???

  • The issue was the woman's daughter also worked here and when the daughter failed to complete her assignments the supervisor had a counceling session with the daughter. The daughter being a hot head, lost her cool & quit, so Mom followed suite. The bottom line is there is a new supervisor over that department and he was requiring them to actually do their job and they didn't like it. I knew they would quit as soon as they were being held accountable. It was just a matter of time.
  • I would pay her for the unused vacation and be done with her. Why stir up more trouble. You said she was not the hardest worker. If she quit for the reasons you say, I would pay her and say good riddance to both her and her daughter.
  • Definately check your states regs. We would handle it by paying out any accrued vacation when they leave, notice or no notice. They would have had to do something really awful, like fraud or steal, for us not to pay it out. She's an upset former employee and not paying it out will make her more upset, and upset people get lawyers.
    Just remember to change your policy if you aren't going to consistently follow it. It is very rare that I do a policy exception, it cuts down on the liability.
  • A N.C. law requires ers to give ees advance notice of policies regarding vacation forfeiture, so the issue is whether you complied with the statute. And how far you'd be willing to take this battle.
    N.C. Gen. Stat. 95-25.12 and 95-25.13.

    By the way, I found this info in an awesome book called 50 Employment Laws in 50 States, whose name says it all. It was compiled by Forum moderator Tammy Binford. I usually don't gush about books that I didn't write x:-8 but this is a very handy reference. If you're interested, you can find a sample chapter here:
    James Sokolowski
  • It looks like you are an safe ground not to pay her, but think about a couple of things before you refuse. The comment about whether you have done it for others is a valid one. Also, who are these "others" who think that you should pay. If it is top management or other influential employees, you might not want to get into an issue with them.
  • CW, I'm in the camp that says DO NOT PAY. However, I would make sure that she did not satisfy the "adequate notice" definition. Hopefully you have that spelled out in terms of a time period.
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