Does an Employer Have to Pay Unused Vacation Time in NY?

By Alice Nichols

If you’re an employee in New York and you have accrued vacation time, you may be wondering if your employer is required to pay you for any unused vacation time when you leave the company. The answer is not a simple one, as it depends on several factors.

Understanding New York State Law

New York State law does not require employers to offer vacation time to their employees. However, if an employer does offer vacation time as part of a benefits package, they must follow certain rules regarding payment for unused time.

Employer Policies

The first thing to consider is your employer’s policy regarding vacation time. If your employer has a policy that states they will pay out unused vacation time when an employee leaves the company, then they are required to do so by law.

No Written Policy

If your employer does not have a written policy regarding payment for unused vacation time, then it becomes a bit more complicated. In this case, New York State law considers the accrual of vacation time as a form of wages. This means that any earned but unused vacation time must be paid out to the employee upon termination of employment.

Pro-Rated System

Another factor to consider is how your employer’s system for accruing vacation time works. If your employer uses a pro-rated system, where employees earn a certain amount of vacation time based on the number of hours worked or length of service, then any earned but unused vacation time must be paid out upon termination.

Exceptions to the Rule

There are some exceptions to the rule requiring employers to pay out unused vacation time in New York State. For example, if an employee is terminated for misconduct or voluntarily resigns without providing sufficient notice (as defined by company policy), then the employer may not be required to pay out any accrued but unused vacation time.

Conclusion

In summary, whether or not an employer in New York State is required to pay out unused vacation time depends on several factors. If your employer has a written policy that states they will pay out unused vacation time, then they are required to do so by law.

If there is no written policy, then any accrued but unused vacation time must be paid out upon termination of employment. However, there are exceptions to the rule, such as termination for misconduct or resignation without sufficient notice. It’s important to understand your employer’s policies and New York State law regarding vacation time to ensure you receive any compensation owed to you upon leaving the company.