Published on March 12th, 2014 by Alan L Sklover
“A vacation is what you take when you can no longer take
what you’ve been taking.”
– Earl Wilson
ACTUAL “CASE HISTORIES”: According to the Bible, even God took a day off after creation. And, so, too, every now and then you need a time to rest, relax and recuperate from what you do all day, all week, and all month long. And that is to be expected.
We receive many questions from our blog visitors about vacation rights and vacation pay. So, in hopes that you are planning a time to recharge your own batteries, and to help you get all of the respite you truly need, we have put together these 50 FAQs about vacation time and vacation pay, and the answers to each.
LESSON TO LEARN: As it is with every other aspect of the employment relation, it pays to know “the rules” of your workplace related to vacation rights and vacation pay, so that you don’t unknowingly violate them, but instead follow them, and make sure others follow them, as well, to your best advantage.
Because so many employers are trying to cut back on pay and benefits wherever and whenever they can, it is more important than ever to know your rights and to be prepared to stand up for those rights in a smart and effective way.
HERE ARE OUR 50 “FAQs” ABOUT VACATION AND VACATION PAY: Remember: These are generalized answers, intended to provide generalized understanding, only. Your state law might provide differently.
a. WHO IS ENTITLED TO PAID VACATION?
1. Is everyone entitled to paid vacation from their employers? In many countries, the law requires employers to provide employees with a certain number of paid vacation days each year. In the U.S., federal law does not require any paid vacation days, and I know of no state laws, either, that require that employers provide employees with paid vacation days.
2. So, why do employers usually provide their employees with paid vacation days? Most people think there are two reasons for this: First, because employees have come to expect paid vacation days off as a part of the employment relation. If an employer did not provide any paid vacation, many employees would not want to work there. Second, most employers understand that, every now and then, people need rest and relaxation away from work in order to continue to do good work. As carpenters often say, “Every now and then you must stop to sharpen your saw.”
3. Can an employer have a policy that says it gives zero paid vacation time to its employees? Yes, but I don’t think I have ever heard of such a policy in my 31+ years working on employment matters.
4. Is there a difference between “vacation pay” and “holiday pay”? In the U.S., we tend to call the employee’s right to take time off for rest “vacation pay” and refer to certain designated holidays each year in which employees also get paid without having to work (such as Labor Day, Memorial Day, and July 4th) “holidays” for which employees receive holiday pay. Outside the U.S., being on “holiday” is synonymous with being on “vacation.”
5. Is there a difference between “vacation pay” and “Paid Time Off” (sometimes called PTO)? In recent years, many employers have found it easier and more efficient to lump together all paid days off, including vacation, sick days and holidays, into one “bucket.” Many of these employers then permit their employees to take this number of days off each year, for whatever reason or rationale they wish. So, for most employers who have aggregated paid days off into “PTO,” vacation pay is a part of that PTO.
6. How can I find out my employer’s vacation-related plans, policies and rules? You should be able to find the details of your employer’s vacation plans, policies and rules in one of these places: (a) Employee Handbook, (b) Company Policy Manual, or (c) from your Human Resources representative.
7. What laws determine whether an employee is entitled to vacation pay? As a general rule, in the U.S., the laws that govern vacation eligibility and rights are the laws of the state in which the employee works. In other countries, most commonly their central governments’ laws determine vacation eligibility.
8. What if (a) my employer is in State A, (b) my office is in State B, and (c) I live in State C? The laws that apply to employees generally follow this rule: the state laws that apply to benefits and wages is the state law of the state in which you “sit” while you do most of your work. For those who travel for a living, such as flight attendants, it would be the state in which they usually depart and return to.
9. How can I find out the laws regarding vacation and vacation pay where I live? I have found it rather easy to determine the state laws that govern vacation eligibility and vacation pay by using Google or other search engines, and putting words like “Vacation eligibility Texas” into the search box. You may need to use a variety of such words before you “hit the target.” Alternatively, you might place “Ohio Labor Board vacation laws” or similar words into a search engine to first find the website of your state’s Labor Board, Department of Labor, Employment Commission or similar governmental agency.
10. Is it legal for an employer to refuse to give paid vacation to part-time employees? Yes, so long as it is not done in a legally discriminatory way, such as on the basis of age, gender, race, pregnancy, etc., and so long as it does not violate a contract. The same is true for temporary employees, probationary employees and independent contractors.
11. Can an employer legally give different amounts of paid vacation time to different employees, based on whether they are clerical, managerial or executive? Yes. That is quite common. Generally, executive employees are provided more vacation time than clerical workers.
12. Can an employer legally give different amounts of paid vacation time to different employees who work in different states, or different countries? Yes. That is quite common.
13. Can an employer legally give different amounts of paid vacation time to different employees or have different vacation rules, based on gender, race, age, or other such basis? No, employment benefits cannot be provided on any such discriminatory and illegal basis.
14. Can an employer legally give different amounts of paid vacation time to employees depending on how long they have worked for the company? Yes, that is very common. For example, (a) no earned vacation during the first year, (b) two weeks vacation per year during the second, third and fourth years, and (c) three weeks vacation after that.
15. Can my employer negotiate with me to get me to waive or give up any of my legal rights concerning vacation? If rights are given to employees by law, then it is generally not possible for an employer to request a waiver of those rights, or for an employee to legally give them up. It is like trading away your right to minimum wage, or a safe workplace: it just will not pass legal muster. If it did, then nearly all employers would do so.
16. How often can an employer change its vacation policies? I know of no law that precludes an employer from changing its vacation policies as often as it wishes. That said, if it began to appear that the employer was changing the vacation policy often in order to confuse, defraud or deny employees their rights, that would not likely be tolerated by state labor officials.
b. HOW IS PAID VACATION EARNED (or “ACCRUED”)?
17. How is vacation time earned? Generally, vacation time is earned over time, “pro rata,” such as one day of vacation earned for each month worked in a given calendar year. It could be on a weekly basis, paycheck basis, monthly basis, quarterly basis, or otherwise. A few employers provide a full year’s vacation time availability to employees on January 1st of each year, but that is unusual.
18. My employer’s vacation policy states that no vacation is earned or accrued during the first six months of employment. Is this legal? Yes, and such provisions are quite common. For this reason, you might want to take some time off between jobs. I once learned that lesson the hard way, and because I did not ask about that “rule,” I did not get a vacation for almost 1-1/2 years.
19. Can an employer “cap” how much earned vacation time I can carry over from one year to the next if I do not use it up? Yes, such “Use It or Lose It” vacation policies are increasingly common. That said, several states provide that earned vacation time is the equivalent of earned wages, and thus cannot be taken away from you for any reason. Check your state’s laws on this.
20. My employer has combined its vacation and sick leave plans into one program called “paid time off” or “PTO,” for short. Is this legal? Yes. This is increasingly common.
21. Can I take an “advance” on my vacation days before I have earned some of them? Some employers have policies that permit that, but most do not. There is nothing stopping employees at companies without such “advance” policies from respectfully requesting such an accommodation.
22. Does vacation time accrue while an employee is out on a leave of absence, or on disability? Generally, employees on paid leave, such as (a) on vacation, (b) taking sick days, or (c) PTO days, earn vacation time during those periods. On the other hand, generally, employees on unpaid leave or “income-replacement” leave, such as (i) workers compensation, (ii) short-term disability, (iii) long-term disability, will not continue to accrue paid vacation time while on leave.
When an employee is on a Family Medical Leave Act (“FMLA”) leave of absence, if he or she is paid using vacation time, sick time or PTO time, vacation time generally accrues, but when the vacation time, sick time or PTO time is exhausted, vacation time generally ceases to accrue.
Also, employees on military leave may be entitled to reinstatement into their jobs with full benefits they would have earned during that leave, including vacation time accrual. That is their right under the Uniformed Services Employment and Reemployment Rights Act of 1994 (“USERRA”), commonly referred to as the “Elevator Principle.”
23. Can I negotiate to receive extra vacation time or some other exception to my employer’s vacation policies? Sure. This is something that is best done (a) after the initial job offer is made, (b) upon promotion, or (c) when retention agreements are made, all times of significant leverage for you.
c. HOW CAN I TAKE MY VACATION TIME?
24. How can I find out how much vacation time I have earned? Your best two ways to find out how much vacation time you have available to you are (a) by reviewing your pay stub, as they often contain such information, or (b) by asking your Human Resources representative in an email.
25. What if those two ways don’t work? Your best next steps would be to follow up any correspondence with your Human Resources representative with an email to the Human Resources Director, making reference that you know vacation time is a kind of wage, and that you do not want to involve your State Labor Board (or equivalent). Your last step would be to file a complaint with your State Labor Board for unpaid wages.
26. Can my employer tell me when I can, and when I can’t, take my vacation? Yes, the needs of your department and organization to maintain adequate coverage of its operations necessitates close coordination between employer and employee regarding when vacation can be taken. As is almost always the case, reasonability is the rule.
27. Can my employer require a certain amount of advance notice before I take my vacation? Yes.
28. Is it legal for an employer to limit the length of vacation time I can take at one time? Yes, to a reasonable degree. For example, it would not be reasonable to demand that you take only one day at a time.
29. Can I be required to respond to emails or telephone calls during my paid vacation time? This is a very common – and “sticky” – question. On the one hand, if you are truly on your own time, as you should be during a vacation, you should not have to do any work for your employer while on vacation. On the other hand, professional obligations and common courtesy often require that you take the time to take a call or respond to an email. If emails, text messages and phone calls take up a substantial part of any vacation day, you have every right to request an additional, “replacement” vacation day.
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30. While on paid vacation, can I work for another employer? This is what I call a “loaded” question, that is, “loaded” like a gun. If the “other employer” is your employer’s direct competitor, surely the answer is “no.” If the “other employer” is in an entirely different field of endeavor, the answer is almost assuredly “yes.”
31. If I must give two weeks’ notice of resignation, can I use my earned vacation time for that? Yes, but there is a “catch” here. While you can say, “I resign effective in two weeks, and the next two weeks I will be on vacation,” if you do not have an employment contract, your employer can say, “Hey, that gives us no transition time; so, you are fired.” If your state is one of those that does require payment of accrued but unused vacation time, you would lose out by (a) losing your vacation time and pay, and (b) being fired, as well.
If circumstances possibly permit, the smarter way to proceed is to (i) take your vacation, and then (ii) give your resignation notice.
d. HOW MIGHT I LOSE MY VACATION RIGHTS?
32. My employer’s vacation policy provides that, if I do not use all of my annual vacation entitlement by the end of the year, that I lose the unused balance; is this legal? As noted above, some states prohibit this because they deem rights to vacation time to be accrued wages. Some states permit it. You should check with your state labor department to determine which approach your state takes.
33. My employer’s vacation policy provides that, if I do not use all of my annual vacation entitlement by the end of the year, I will be paid for the vacation time I did not use; is this legal? Yes, in all states that I know of.
34. My employer punishes employees for such things as being late or missing meetings by denying them vacation days. Is this legal? No. An employer cannot deny earned wages as a punishment.
35. If my employer changes its vacation policy, do I lose what I have earned? No, you should not lose anything you have previously earned. Changed vacation policies should only affect future earning, or taking, vacation time.
36. What happens to my earned or accrued vacation time if I am discharged or quit my job? Most states require payment of accrued but unused vacation time to be paid to employees who leave employment for any reason, but this does vary widely. New York State law says only that, if it is the employer’s policy to pay earned but unused vacation time upon departure, then the employer must follow that rule with you; however, if that Is not the employer’s policy, then the employer has no such obligation.
Monies due you (vacation, commissions, bonus, wages, expenses, etc.) owed you by former employer? After leaving, you are free to make your “demand.” We offer a Model Letter Requesting Monies Due You by a Former Employer. Shows you “What to Say, and How to Say It.”™ To obtain your copy, just [click here.] Delivered by Email – Instantly!
37. Can an employer retaliate against an employee who objects to not being given accrued vacation time or payment for it? It can happen, but it sure would not be legal, unless the employee did it in a way that caused disruption or interference in doing so. If this happens to you, your best bet would be to contact your state’s Labor Board and find out how to file a retaliation complaint.
38. What can I do if my boss “strongly discourages” me from taking my vacation? My own sense is that this is incredibly common and difficult to counteract. Opposing it could potentially put a “chill” between you and your boss. I would always recommend that you keep a record – at home – of when this happened and how it happened, for later use if you need it. If your boss does this to the extreme, and with others besides you, you might consider (a) an anonymous complaint to Human Resources or Senior Management, (b) an email to your boss politely explaining your need for vacation time, or (c) seeking a new job.
e. HOW CAN I GET PAID FOR MY VACATION TIME
39. My employer allows its employees to take their vacation before it is actually earned or accrued. Last month I took my three weeks vacation before I had actually earned all of it. I quit my job this month and my employer deducted all of the unearned vacation days that I had taken from my final paycheck. Can he do this? Here, as is frequently the case, the law of your state will control. In some states, an employer is prohibited from doing that, because *(a) your salary amount is clear, but your (b) earned vacation amount may not be entirely clear. Thus, such “self-help” measures are strictly forbidden; instead, employers would need to go to court to prove they are due what they say they are due. In other states, employers are free to deduct from final paychecks any amount they believe in good faith they are due. For clarity, you must check with your state’s labor department or board.
40. If my former employer refuses to pay me vacation pay I am owed, how can I collect it? The choices are three: (a) a polite letter to senior-most management, (b) a complaint to be filed with your state labor department for unpaid wages, or (c) a small claims court claim filed for the amount in question.
41. If my employer goes bankrupt, how can I collect my earned vacation pay? When a company files for bankruptcy protection, it must list its creditors with the Bankruptcy Court, which will then notify you. If you do not get a letter from the Bankruptcy Court, you can ignore the Bankruptcy Proceedings and later file a Court Claim against your employer. If you do receive a notice from the Bankruptcy Court, then you must file a Notice of Claim form and wait to see how much, if any, the Bankruptcy Court decides you should be paid.
42. If I am going to take an unpaid Family Medical Leave Act (“FMLA) leave of absence, can I request that I be paid my vacation pay during that time? Yes, in fact many employers encourage or require that employees use their accrued but unused vacation time for income during any such FMLA leave of absence, which is otherwise unpaid.
43. If I am owed vacation time and am laid off, or are fired or I quit, how soon should I expect my employer to pay me those monies? As soon as you are entitled to your unpaid salary or hourly wages. In some states, that is immediately; in others it is three business days, or two weeks. You can find out the deadline from your state labor department website.
44. Can I suggest to my employer that I need “the money” more than I need “the relaxation?” Sure, and many employers may prefer you do just that.
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45. Is vacation pay taxed just like other pay? Yes, it is considered earned income just like salary or hourly wages.
46. What happens to an employee’s accrued vacation if they pass away? An employment termination due to the employee’s passing is treated the same way as any other employment termination, and that depends on state law in which you work. As noted above, some states permit employers to take a “Use-It-Or-Lose It” approach to earned but unused vacation, while in other states – where earned vacation time is seen as a kind of earned wages – employers are strictly forbidden to deny any employee, living or deceased, wages previously earned.
47. If I am laid off and given severance, can my earned vacation time be deducted from the severance? This is a bit of a tricky question. While you cannot be denied earned vacation time in many states, in almost all states you can be denied paid severance, unless you have a right to that from a contract. So, while vacation time cannot be “deducted” from severance, in most circumstances, severance can be reduced or eliminated altogether without redress by the employee.
48. Is it true that many employers are cutting back on paid vacation time? Absolutely. And studies show this is a worldwide phenomenon, as employers struggle with the perceived need to get more work done by fewer employees.
49. Is it true that many employees are afraid to use their vacation time? Absolutely. Studies show that more employees than ever do not take their vacations out of a fear that it could be held against them, or they could be viewed as lazy or disloyal for doing so.
50. Can my employer dictate that I can’t travel to certain places (like Tibet), or do certain things (like try parachute jumping), or who I spend my time with, while on my vacation? As a general rule, employers cannot dictate your personal life, unless what you do on your personal time might reasonably affect its operations or business. So, you could travel to Tibet if you wanted to, unless your company’s primary client was the People’s Republic of China, which does not recognize Tibetan independence, and might frown on your traveling there, and your employer reasonably believed this could hurt its business. Taking very risky vacations could be seen to result in more injuries and thus increase your employer’s health insurance premiums. And you can travel with whomever you wish, but if it is your subordinate, that could cause jealousies and resultant tensions in the office.
P.S.: When leaving employment – for any reason – ALWAYS ask to be paid for Accrued But Unused Vacation. Use our “Model Letter Requesting Payment for Accrued but Unused Vacation – with 12 Great Reasons.” It shows you “What to Say and How to Say It.”™ To get your copy, just [click here.] Delivered by Email – Instantly!
SkloverWorkingWisdom™ emphasizes smart negotiating – and navigating – for yourself at work. Negotiation and navigation of work and career issues requires that you think “out of the box,” and build value and avoid risks at every point in your career. We strive to help you understand what is commonly before you – traps and pitfalls, included – and to avoid the bumps in the road. Knowing your rights, your responsibilities, and your options regarding vacation time and vacation pay is an important part of that knowledge and understanding you need.
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*A note about our Actual Case Histories: In order to preserve client confidences, and protect client identities, we alter certain facts, including the name, age, gender, position, date, geographical location, and industry of our clients. The essential facts, the point illustrated and the lesson to be learned, remain actual.
Please Note: This Email Newsletter is not legal advice, but only an effort to provide generalized information about important topics related to employment and the law. Legal advice can only be rendered after formal retention of counsel, and must take into account the facts and circumstances of a particular case. Those in need of legal advice, counsel or representation should retain competent legal counsel licensed to practice law in their locale.
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