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Vacation time payment concerns

Q: I just left my job to take another job closer to home. I had 3 weeks of vacation. I was only paid a portion of that vacation time. What gives? I think I should have received reimbursement for all 3 weeks. What’s your opinion? Should I file a complaint?

A: Congratulations on landing a new job in a difficult employment market!

You are correct that vacation time should be paid out to an employee who is separating. However (and this is a significant however), your payment should include only unused but accrued vacation time.

Let’s talk numbers. The three weeks that you had at your former company was likely an annual allotment. So, three weeks over a 12-month period. According to my calculations, this would equate to 1.25 days per full month of work. Employers are permitted to create their own policies around vacation time. Some of my clients require that you work the entire month to earn the 1.25 days of vacation time. Some of my clients require that you work at least through the 15th of the month.

As an example, let’s assume that you took no vacation time from January 1, 2011 until your last date of employment. Let’s assume that your last date of employment was May 31, 2011. Your calculation would be 5 months (worked) divided by 12 months (full year). You would be eligible to receive 42% of your 3 weeks (or 15 days of vacation time, assuming you work 5 days per week). Your final vacation payment should be 6.3 days of vacation pay.

You may want to check your former employer’s vacation policy. Employers are legally obligated to pay any unused but accrued time. However, it is unlikely if you left during the year that you would be entitled to a full three weeks of vacation time. It is also reasonable to contact your former employer and ask them to explain the calculation. It sounds like perhaps you misunderstood how vacation pay-outs are calculated.


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