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Penalty for Accrued Vacation

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  • Penalty for Accrued Vacation

    I recently told my boss that I would be leaving in August to go back to school. I also asked if I could have some time off to visit a few of the universities that accepted me. My boss agreed, but said that I need to be careful of our vacation policy. If I take too much vacation, I might have to pay the company back. I didn't know it, but technically not all of my vacation days for a year are available to me at the beginning of the year. I get more to use every month. If I use more than I've accrued and then quit, I (may) owe the company money for the extra days.

    I found the following statement in our HR policies about vacation:

    "On termination of employment, the employee is paid for all accrued but unused vacation at the employee’s base rate of pay at the time of his or her termination rounded to the nearest day. If the employee has taken vacation in excess of the prorated vacation entitlement, the overpayment shall be reconciled as permitted by state law."

    The plant where I work is in Texas, but the company that owns it is not based in Texas.

    My question is, what is permitted by state law?

  • #2
    Texas law does not address this situation specifically. However, it has been held by some courts, but not others, in some states, that overtaken vacation can be considered an advance against wages, and therefore, deductible from an employee's final check.

    The wise thing to do, therefore, is to not take anything you have not yet accrued. Then it's not an issue.
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    • #3
      I love semantics

      Actually, Patty is probably right on this, and certainly correct that you should not use any vacation time not accrued.

      I do think that Texas law addresses this, although rather obliquely. If an employer has a policy that says "On termination of employment, the employee is paid for all accrued but unused vacation at the employee’s base rate of pay at the time of his or her termination rounded to the nearest day.", it would seem that the employer is obligated by Sectoin 61.001 (7) of the Texas Payday Law to pay accrued but unused vacation time, since it is wages, and is payable under this section of the law.

      Further, the policy statement "If the employee has taken vacation in excess of the prorated vacation entitlement, the overpayment shall be reconciled as permitted by state law." would fall under the Texas Administrative Code, (also known as the Texas Payday Rules), which provide that a policy manual (signed by the employee) can be used to establish authorization to withhold wages... This would give the employer, in my mind, the ability to withhold the overpaid amount from final pay. At the very least, it would establish a valid claim for any overpayment, and coult be used in a suit or recovery action for overpayment.

      Again, wisdom would dictate that you don't use more time than you accrue.

      If hairs are sufficiently split, I'll go back to my room.

      The orginal reply is correct. I just had to add my $.04 worth. (That's right, everything is bigger in Texas)

      Comment

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