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Should I Get Compensated for Leftover Vacation Time?

Many families across the country take part in vacations during the summer months. It’s easier to travel as most children are out of school and the warmer weather is welcoming for those who want to spend time outdoors. Depending on the company and an employee’s status, vacation time may be offered or given so individuals can take part in time away from work. But want happens if an employee leaves a company, whether on their terms or not, and has vacation time left over?

There is no universal law regarding this issue as employees can be considered exempt or non-exempt and not all employers offer this benefit. However, many states have adopted the rule that employees who leave a company and have leftover vacation time should be compensated for those hours.

Texas Law

The Texas Payday law states that employees are entitled to be compensated for leftover vacation time only if it is explicitly stated in a company contract or agreement. If the employer does not have a policy stating what happens to excess vacation time if an employee leaves a company, then the employer is not obligated to pay the employee for leftover vacation time.

California Law

California is similar to Texas in that a written policy must be in place for an employee to be paid for spare vacation time. Additionally, if an employee does receive compensation for leftover vacation time, that payout must be at the regular hourly rate the employee was earning.

Use It or Lose It Policy

A handful of states have prohibited the policy dubbed “use it or lose it.” This means that an employee who does not use their vacation time by a specific date or before leaving the company will “lose” or not be awarded payment for that leftover vacation time. States that do not allow this rule include California, Montana, and Nebraska.

In other states, if an employer explicitly notes in their vacation time policy that there is a cap for vacation time accrued, then, in theory, an employee could “lose” that vacation time and not be compensated for it.

Nationwide Wage & Hour Attorneys

Because each state has its own laws regarding vacation time payout and employers can make their own policies as well, it’s critical to contact a wage and hour attorney if you believe you were not properly compensated for leftover vacation time. The team at Kennard Law, P.C. is here for you for any employment law matter. Contact our knowledgeable attorneys either online or by phone. (855) 499-4514