Does my employer have to pay me for my accrued vacation time?
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Does my employer have to pay me for my accrued vacation time?
I have been with the company for 10 years and have over 200 hours of vacation, a large part of it rolled over from previous years and partially accrued this year. Before November 2018 the policy was that if you voluntarily terminated your employment, you would be paid for any unused vacation, but in November they changed the policy to where you would loose any rolled over hours, and would only receive payment for the time accrued during the calendar year. Can they legally forfeit the rolled over vacation time?
Asked on May 7, 2019 under Employment Labor Law, Alabama
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 5 years ago | Contributor
They can change the policy going forward or prospectively, but not retroactively: any vacaction days you accrued for working are days they have to pay out (and let you roll over) as per the policy in place when you earned they those days. That is because as a matter of contract law, you did work in exchange for certain compensation and benefits; since you did what you were supposed to (you did the work), the employer must do what it promised. So they can't make you forfeit the previously earned hours, but do not have to allow you to roll over additional hours in the future; hours earned after announcement of the policy can be lost if not used during the year in which they are earned.
Note however that it would be legal to have any vacation days or hours you use come first from the oldest hours you earned: i.e. if you take vacation, they can take the time you use from your oldest (i.e. previously accrued hours) and so whittle them down that way as you take vacation.
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