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Docking vacation in last paycheck

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Q:  I just gave my notice to accept a new role at another company.  I was shocked that they are deducting some money from my last paycheck for a “vacation overage.”  I was planning on this final paycheck to pay some bills.  I took two weeks of vacation earlier this year to get married.  Is this a common practice when an employee leaves in the middle of a year?  I feel like I was short-changed.

A:   When an employee separates from a company, there are often many loose ends that need to be addressed.  Often times, an employee who is resigning has many questions about their final paycheck and benefits.   Questions about vacation payouts for unused but accrued vacation time are common as well.  Company policies can vary on vacation usage, accrual schedules and how vacation time is earned. 

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It sounds like you took two weeks off earlier this year to get married.  Congrats on your marriage!  Most employers have an accrual system for vacation.  Translated, that means that an employee earns vacation time during the calendar year in which they work.  As an example, if Chris had three weeks of vacation time for 2021, Chris may have accrued 1.25 days per completed month of service.  If Chris’ last day of work was June 4, 2021, Chris would have earned 6.25 days for 2021.  Since Chris didn’t work a full year, the three weeks wasn’t fully available to Chris.  The full three weeks would have only been available to Chris if Chris had worked through the end of the calendar year.  If Chris took 10 days off in early 2021, then Chris would owe the company 3.75 days of vacation time.  Without knowing your company’s vacation policy, it is difficult to guess.  However, my educated guess is that the company is taking back some of the vacation time that you took earlier in 2021 because it was not yet earned.   An employer will often permit an employee to take more than they have earned and “go into the negative” because the employer is assuming that the employee will work through the full calendar year.  Additionally, it may be burdensome to the employer if everyone waited until year-end to take their earned vacation.  Again, company policies can vary but an accrual system for calculating time off earned is common. 

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I am sorry you were disappointed.  Hopefully, this explanation makes it a bit easier to understand.  Additionally, employers are not required to give vacation time to employees.  Many employers offer paid vacation time to employees as it is a piece of their compensation and benefits offering. 

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