Q: I recently gave notice to my current employer and accepted a role, which would give me more flexibility. For the past four years, I received four weeks of vacation time. I expected to take some time off this summer. Do most companies cut you a check for the vacation time? That is what I was told by several colleagues. I was planning on that and now I am being told that I will only receive a fraction of that time.
A: It is wonderful to hear that you landed a new opportunity, in a somewhat challenging employment market!
Most employers understand that they are required to pay you for any wages due when an employee leaves the organization. Wages due often includes vacation time. Your final wages due though should include only unused but accrued vacation time.
It sounds like the four weeks of vacation time was your annual accrual. If you worked at your company for 12 months, you would have been able to take four weeks of vacation time during 2021. Since you are leaving before December 31, 2021, you should only be eligible for a pro-rated amount of vacation time. Generally, employers are permitted to create their own policies around vacation time within some very broad guidelines. Some of our clients require that an employee work the entire month to earn a full month of accrued time. While, other clients require that an employee work at least through the 15th of the month.
If you worked through January, 2021, you should receive just under 10% of your annual vacation time. You may want to check your former employer’s vacation policy. Employers are legally obligated to pay a departing employee any unused but accrued time for sure. However, it is unlikely if you left during the year that you would be entitled to a full four weeks of vacation time. It is also reasonable to contact your former employer and ask them to explain the calculation, if it is not specified in your employee handbook or time off policy. It sounds like perhaps you misunderstood how vacation payouts are calculated.
On a related note, in Massachusetts, an employer can cap the amount of vacation time an employee can earn and also implement a “use it or lose it” policy. A “use it or lose it” policy requires employees to use their accrued vacation time by a certain date (usually December 31) or the employee will lose that time.