Vacation payout upon resignation

posted in: Job Doc Blog | 0

Q: I recently left my job and expected to received a payment for my unused vacation time.   After 10 years of service, I was supposed to earn four weeks of vacation time.   Our employee handbook outlines that employees earn a certain amount per month.  My last day of work was March 2, 2018.  I think I should have been paid for the four weeks of vacation time as I could have taken four weeks off in early 2018 and then resigned.   But I didn’t take any vacation time in 2018.

Can you tell me how this typically works?

A: It sounds like you enjoyed a generous time off policy at your last employer.  Vacation is a valuable benefit that allows employees time off to rest and recharge the batteries.  Though it is surprising to some, paid vacation is not legally required in most states, including Massachusetts.  Employers offer paid vacation as part of a total compensation offering.

Most employers have a written vacation policy although not required.  In Massachusetts, employers are permitted to create their own system of accruing (or earning) vacation time.  Some employers require an employee to work through an orientation or onboarding period before the employee can begin earning this time.  Other employers specify how employees earn vacation time.  It sounds like your former employer had a policy which detailed that employees earn a specific number of days per month.  Most employers have a similar policy.   In your situation, if you were able to earn four weeks of vacation time per year, you would earn 1.67 days per month.  Some policies may even state that you need to work the complete month.  Since you worked January and February, you would be entitled to 3.34 days of pay.  However, depending upon the wording of your policy, you may be able to add another 1.67 days (for March) to that number for a total of 5.01 days.  Usually when we work with clients on writing vacation policies we include language which links completed months of service to earning vacation time.

It would be unusual (almost unheard of) to pay an employee for four weeks of vacation if the employee left mid-year or early in March.  If you had taken four weeks of vacation in January or February, your employer would have likely calculated what you had earned vs. what you had taken.  Employers sometimes will reconcile what has been earned vs. what has been taken in the last payroll cycle.

You should have been paid for any unused but accrued vacation.  If you were not, contact your former employer and explain that you believe you are owed for this time.  If your former employer doesn’t cooperate, you can contact the Attorney General’s office and file a wage claim.  You are very likely NOT owed four weeks of time but instead a certain number of days, depending upon how your former company’s policy is written.

Pattie Hunt Sinacole is a human resources expert and works for First Beacon Group in Hopkinton, an HR consulting firm. She contributes weekly to Jobs and the Boston Sunday Globe Money & Careers section.