Hi Everyone,

Hope all is well.

Can you tell me if there is a law that states you have to pay someone accrued vacation pay at termination.

Thanks,
:)

In New York, whether or not unused vacation time must be paid at termination depends on company policy.

However, NY is different from many states in that vacation pay is due at termination UNLESS there is a written policy that indicates the circumstances under which it will be forfeited.

So if the company policy does not address the issue, vacation pay must be paid at termination. If, however, the policy spells out the circumstances under which it will and will not be paid out, the law is not going to require that the employer pay it unconditionally.

I understand that if the Company has a policy regarding vacation pay / benefits at termination the Company may not have to pay a departing employee. A couple question scenarios:

(1) Employee is terminated for cause - employee handbook indicates any employees terminated for cause lose any remaining vacation, etc. - Legal?

(2) Employee leaves without providing two weeks notice - employee handbook indicates that vacation benefits, etc., are gone if employee fails to provide two weeks notice - Legal?

(3) Employee is entitled to earn 5 days vacation on an annual basis - employee handbook indicates that vacation days are earned in the year which they are to be taken on a pro rata basis; employee provides two weeks notice after already using but not having yet earned all 5 vacation days for the year (i.e. only earned 3 year to date) - legal for employer to deduct equivalent of 2 days vacation from final paycheck?

1.) Legal - yes

2.) Legal - yes

3.) Legal - yes

NY law does NOT require unconditional payout of unused vacation time. It is perfectly legal for them to put restrictions on how and when it will be paid, and to hold the employees to those restrictions. NO state requires that an employee be paid vacation hours they have not yet earned.