When it comes to employment termination, many employees are not aware of their rights regarding vacation payout. Several states in the United States have laws that require employers to pay out any accrued vacation time when an employee leaves the company.
However, not all states have these laws in place. In this article, we will take a closer look at which states require vacation payout upon termination.
What is Vacation Payout?
Vacation payout refers to the practice of compensating an employee for any unused vacation time when they leave their job. This payout can come in the form of a lump sum payment or as part of the employee’s final paycheck.
Which States Require Vacation Payout Upon Termination?
The following states require employers to pay out accrued vacation time upon termination:
- California
- Illinois
- Massachusetts
- Maine
- Nebraska
- Nevada
- New York
- Pennsylvania
- Rhode Island
- Tennessee
- Texas
- West Virginia
If you work in one of these states and have accrued vacation time, your employer is required by law to pay you for that time when you leave the company.
States with Partial Requirements for Vacation Payout Upon Termination:
Some other states have partial requirements for vacation payout upon termination. In these states, employers are only required to pay out unused vacation time if it is specified in the company’s policies or employment contracts. The following states fall under this category:
- Alaska
- Arizona
- Colorado
- Connecticut
- Hawaii
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maryland
- Michigan
- Minnesota: Employers are required to pay out vacation time if they have a policy or practice of doing so.
- Montana: Employers are required to pay out vacation time unless they have a written policy that allows forfeiture of unused vacation time upon termination.
- New Hampshire: Employers must pay out accrued vacation time if their policy or contract states that they will do so, or if the employee has been employed for at least one year.
- North Carolina: Vacation payout is required only for companies with more than 100 employees.
- Oregon: Employers must pay out accrued vacation time if their policy or contract states that they will do so, or if the employee has been employed for at least one year.
- South Carolina: Employers must pay out accrued vacation time if their policy or contract states that they will do so.
- Virginia: Employers must pay out accrued vacation time if their policy or contract states that they will do so, or if the employee has been employed for at least one year.
- Washington: Employers must pay out accrued vacation time if their policy or contract states that they will do so.
States with No Requirements for Vacation Payout Upon Termination:
The following states have no laws requiring employers to pay out accrued vacation time upon termination:
- Alabama
- Arkansas
- Florida
- Georgia
- IDaho
- Mississippi
- Misssouri
- New Jersey
- New Mexico
- North Dakota
- Ohio
- Oklahoma Rhode Island /LI
If you work in one of these states and have accrued vacation time, your employer is not required by law to pay you for that time when you leave the company. However, some employers may choose to provide a payout as a matter of company policy or practice.
Conclusion
Understanding your rights as an employee when it comes to vacation payout is essential. If you work in one of the states that require vacation payout upon termination, you are entitled to compensation for any accrued vacation time. However, if you work in a state with no such requirement, it’s up to your employer’s policies or practices whether or not you receive any payout.