Q: I had a baby in June, 2010. I work for a large employer in Massachusetts. I applied for and received a Family and Medical Leave Act leave of absence. Here is my concern though. I have 3 weeks of vacation to use every calendar year. If we do not use it in the calendar year, the company can take it away. (Is that even legal?) My bigger question though is I wanted to extend the paid portion of my leave and use my three weeks of vacation time. Seems reasonable since others are taking 2- 3 weeks off over the summer, right? I was told by HR that I could not use the full three weeks. I was told I could only use what I had “accrued but not used.” This amounts to about 1.5 weeks. This doesn’t seem fair. I see co-workers using a full week for all of February vacation. How could they have accrued that time by the second month of the year? I also see coworkers taking 2 weeks of vacation over the summer when they only have 3 weeks of vacation. I feel like I am being treated differently. What do you think? Thank you. I like this column.
A: First, congratulations on having your baby! Now, let’s address your questions. Your first question asks whether or not it is legal for an employer to “take away” vacation time that you have earned, but not used, at of the end of a calendar year. I consulted Jeffrey A. Dretler, a partner in the Labor and Employment Practice at Prince, Lobel, Glovsky and Tye LLP. Dretler explains, “The answer is yes — provided that your employer has given you prior notice of such policy and a reasonable opportunity to use the accumulated vacation time within the calendar year (or such other time as your employer may establish). The Massachusetts Attorney General’s Fair Labor Division, which has authority to enforce the state’s wage and hour laws, has declared that these kinds of policies, often called ‘use it or lose it’ policies, are acceptable variations of an accrual cap (capping the amount of vacation time an employee may earn) and can be used to eliminate or limit the amount of vacation time an employee may carryover from year to year.”
The answer to your second question is a bit trickier though. And it largely depends on your employer’s internal policies and practices. The federal Family and Medical Leave Act (FMLA) permits an employee to elect or an employer to require that an employee substitute paid leave, including but not limited to accrued but unused vacation time, for unpaid leave granted under the FMLA. An employer is not required to permit employees to borrow against vacation time that has not yet been accrued. However, as you shared, it seems like other employees are borrowing against their annual vacation allotments which is not that surprising since it is a relatively common practice.
Here is where it gets a bit tricky. Dretler continues, “Under the FMLA and the Massachusetts Maternity Leave Act (MMLA), among other laws, employers may not ‘discriminate’ against employees in the administration of their paid leave policies by, among other things, treating pregnancy-related disabilities differently that other temporary disabilities. Thus, if an employer permits employees on temporary leaves of absence for reasons other than pregnancy to borrow against future vacation time, the employer must make the same benefit available to employees on leave for pregnancy-related conditions.” In general, an employer could permit an employee, to borrow against vacation time to be accrued in the future (for example, to take a two week vacation in February), but disallow that practice in situations where an employee is on short-term or other type of disability leave provided that such practice is uniformly applied to employees on all types of disability leave, not just pregnancy-related disability leave. One reason that an employer may adopt such a practice is that it may perceive a greater risk that an employee who is away from work for an extended period of time (up to 12 weeks under the FMLA) is less likely to return to work after the leave of absence than is an employee who takes a short vacation. You may be correct that you are being “treated differently,” but it may or may not be unlawful. Dretler recommends asking the human resources department for a copy of any written company policy that addresses these issues in order to get a better understanding of your rights.
Most of my clients treat all employees uniformly with regard to vacation pay usage. In short, they allow the use of unused vacation time in advance. However, if the employee leaves the company before year-end, any used but not yet accrued vacation time will be deducted from the employee’s final paycheck. This practice reduces the concerns over fairness and consistency.