Does Your Employer Have to Pay You For Unused Vacation Time?

Employers in Massachusetts must pay out the cash value of your accrued but unused vacation time

Employee Paid Vacation DaysThe Massachusetts Wage Act requires employers to pay employees all wages owed when an employee separates from employment. This is true whether an employee leaves voluntarily or is discharged. In Massachusetts, the cash value of an employee’s accrued but unused vacation falls within the Act’s definition of “wages” and must be paid out by the employer. Employers who fail to do so are potentially liable for triple damages, courts costs and attorney’s fees. Read on to learn more about massachusetts wage law. To learn more about your specific case contact an employee rights lawyer today.  Scheduling a consultation with Hyber, Mckenna, & Dinsmore, LLC can show you you best chance at compensation, get to know our firm today.  

  • When must employers pay?  Employers in Massachusetts are not required to provide vacation time, but when they do, the cash value of accrued but unused vacation time must be paid out upon job separation.  When an employee leaves work voluntarily, the cash value of his or her vacation time must be paid out in the next regular pay cycle. When an employee is fired, his or her vacation wages must be paid out on the date of termination.  
  • When is vacation “accrued?”  Absent agreement to the contrary, vacation time is accrued over time.  For instance, if your employer offers four (4) weeks of vacation per year, and you leave work after 6 months, you have accrued half of your vacation time, or two weeks.  
  • What if my employer combines sick, vacation and personal time?  Many employers combine sick time, personal time, and vacation time into one general PTO bank of time.  If an employer’s PTO policy does not specifically delineate which portion of the leave bank is attributable to “sick leave,” employers who don’t pay out the entire leave bank upon an employee’s separation may face liability.  
  • What if my employer provides “Granted Time Off” rather than Vacation?  In an attempt to avoid liability under the Wage Act, some employers have discarded “vacation time” as a category of leave and instead provide employees with so-called “granted time-off.”  Under such policies, employers claim that the leave bank is not “earned” but given freely by the employer. Since the paid time off is not, by definition, “earned” then employers argue that it does not constitute “wages” under the Massachusetts Wage Act. It is doubtful that this mere change in terminology will convince courts that “granted time off” falls outside of the definition of “wages.”  
  • What if I agree to forfeit my rights to vacation pay?  The Wage Act also prohibits any person from “entering into a special contract with an employee” in which the employee agrees to forfeit his or her right to vacation time.  Accordingly, your employer must pay you the cash value of your accrued but unused vacation time upon separation, even if you agree to forfeit it. The prohibition on “special contracts” was designed to deter aggressive employers from forcing their employees to waive rights secured by the Act.  One exception is “use it or lose it” policies in which employees must use their vacation within a particular period of time or lose the right to take paid vacation. As long as the employee was given a reasonable time to use his or her vacation time, such provisions are enforceable.  

Are you an employee in Springfield, Northampton, Holyoke, West Springfield, Westfield, Agawam, Chicopee or Greenfield who has been denied wages under the Wage Act? If so, contact Hayber, McKenna & Dinsmore, LLC for a consultation

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