If you’re an employee, chances are you’ve heard of “use it or lose it” vacation policies. These policies require employees to use their vacation time by a specific date or forfeit it altogether.
However, not all states allow this type of policy. Let’s take a closer look at which states prohibit use it or lose it vacation policies.
What is a Use It or Lose It Vacation Policy?
A “use it or lose it” vacation policy is a company policy that requires employees to use their allotted vacation time by a specific date or forfeit the unused time. For example, if an employee has three weeks of paid vacation time in a year but only uses two weeks by the end of the year, they will lose the remaining week of vacation unless otherwise specified by their employer.
States That Prohibit Use It or Lose It Vacation Policies
Not all states allow employers to have “use it or lose it” vacation policies. In fact, nine states have laws that prohibit this type of policy altogether. These states include:
- California
- Illinois
- Louisiana
- Maine
- Massachusetts
- Nebraska
- New York
- Pennsylvania
- Rhode Island
California
In California, employers are required to pay out any unused vacation time to employees upon termination. This means that if an employee leaves the company and has unused vacation time, they must be compensated for that time.
Illinois and Louisiana
Both Illinois and Louisiana have laws that require employers to compensate employees for any earned but unused vacation time upon termination.
Maine
In Maine, employers must provide employees with a written policy regarding their vacation time. This policy must state whether or not any unused vacation time will be paid out upon termination.
Massachusetts
In Massachusetts, employers are required to compensate employees for any earned but unused vacation time upon termination.
Nebraska
In Nebraska, employers are prohibited from having “use it or lose it” vacation policies unless the employee is given a reasonable opportunity to take the vacation time.
New York
New York requires employers to pay out any unused vacation time to employees upon termination if the employer’s policy does not provide for the forfeiture of unused vacation time.
Pennsylvania
In Pennsylvania, employers are required to compensate employees for any earned but unused vacation time upon termination.
Rhode Island
Rhode Island prohibits “use it or lose it” vacation policies unless the employee has been given a reasonable opportunity to take the vacation time.
Conclusion
If you live in one of these nine states, you can rest assured that your employer cannot have a “use it or lose it” vacation policy. However, if you do not live in one of these states, it’s important to check your employer’s policies regarding vacation time. If you have any questions about your rights as an employee, consider consulting with an employment lawyer.