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Vacation pay

Vacation pay FAQs for Massachusetts employees

Employers who choose to provide paid vacation to their employees must treat those payments like any other wages under the Massachusetts Wage Act.  Like wages, the vacation time promised to an employee is compensation for services which vests as soon as the employee’s services are rendered. Failure to pay earned vacation time triggers mandatory treble damages under the Wage Act.

1. Am I entitled to vacation pay when I leave or am laid off?  Yes.  Upon separation from employment, employees must be compensated by their employers for vacation time earned under an oral or written agreement.

2. Can I lose my earned vacation time if I am fired or laid off or if I quit?  No.  Since the Wage Act provides for the timely payment of all wages earned, an employer may not enter into an agreement with an employee under which the employee forfeits earned wages, including vacation payments. Examples of these improper agreements are vacation policies that condition the payment of vacation time on continuous employment or that require that employees provide notices to quit. Employees who have performed work and leave or are fired, whether for cause or not, are entitled to pay for all the time worked up to the termination of their employment, including any earned, unused vacation time payments.

3. Do I have to use all my vacation by a  specific time?  Maybe. An employer may require employees to use all of their accumulated vacation time by a certain period of time or lose all or part of it.  BUT, if that is the employer’s policy, the employer must provide adequate prior notice of the policy to employees and must ensure that employees have a reasonable opportunity to use the accumulated vacation time within the time limits established by the employer. Otherwise, a cap on accrual or a “use it or lose it” policy may result in an illegal forfeiture of earned wages.

4. How much vacation pay do I receive if I leave when the employer grants vacation in block of time? Unless the employer specifies otherwise, vacation time is earned according to the time period in which the employee actually works.  For example, if an employee is to receive twelve vacation days in a year, and the employee voluntarily or involuntarily terminates his or her employment after ten months, the employee would be entitled to ten vacation days.

5. Can the employer require the employee to sign a release of legal claims in order to get earned vacation pay?  No.  The employee is already entitled to earned vacation pay due to the work performed by the employee.

Pamela A. Smith
Law Office of Pamela A. Smith
233 Needham Street, Suite 540
Newton, MA 02464
617-969-2900

pam@pamsmithlaw.com

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