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Vacation Time

IMPORTANT NOTICE

This portion of the Neponset Valley Chamber website contains information on various employment-related topics. The materials included on each topic do not necessarily comprehensively cover the entire topic. Each section contains articles or memoranda that NVCC H.R. Council members who are employment law attorneys or human resources consultants have written in relation to the various topics. The most recently provided information under each topic will appear first. The information provided in these articles/memoranda was accurate at the time it was first issued. However, you should be aware that employment law is frequently subject to change. Thus, information on this website may not still be completely accurate at the time you read it. The information here should provide helpful guidance, but is not intended to constitute legal advice applicable to any particular situation. You should also be aware that the Neponset Valley Chamber of Commerce has provided this information as a service to our members. However, the information provided is not advice provided by the Chamber of Commerce, nor would the Chamber of Commerce be in any way legally responsible for any inaccuracies. Any opinions expressed are strictly those of the authors.

Vacation Time

By Attorney Leslie Lockard
The Law Office of Leslie Lockard, PC
1500 Providence Highway, Suite 33
Norwood, MA 02062
Phone (781)551-0800
Fax (781)551-0801
Llockard@leslielockard.com
www.leslielockard.com

The Massachusetts Supreme Judicial Court, in the case of EDS Corp. v. Attorney General, recently affirmed the assessment of civil penalties against an employer which had failed to pay unused vacation time to a terminated employee. The court decided that the employer's written vacation policy was ambiguously drafted, and found that the employee should have been paid for his unused vacation time.

Many employers may be unaware that the Massachusetts Attorney General has issued an Advisory on vacation policies, which sets forth his department's view of the procedures employers are required to follow with regard to employee vacations. This Advisory was issued in connection with the Massachusetts Payment of Wages Statute, M.G.L. c.149, §148, which requires prompt payment of wages to employees. This statute includes in the definition of wages, "any holiday or vacation payments due an employee under an oral or written agreement". Failing to pay an employee for accrued, unused vacation time could result in an assessment of civil damages, or even criminal penalties. It is therefore advisable that all employers understand the legal requirements relating to the administration of vacation policies.

Employers are not required to provide vacation time to their employees, but most do so. Employers who do grant vacation time should adopt unambiguous vacation policies which make it clear exactly when vacation time accrues. For example, policies which grant employees two weeks of vacation "per year", or "every six months", or "on their anniversary date" are not considered sufficient by the Attorney General because it would not be clear exactly when an employee's vacation time would accrue. Examples of acceptably clear vacation policies would be one in which one day of vacation time accrues on the last day of each month, or a vacation policy by which one week of vacation accrues on January 2nd and the second week accrues on July 2nd. Under the latter policies, it would be possible to determine exactly how much accrued unused vacation time a departing employee is due, no matter when during the year the employee leaves. Employers who combine sick leave, personal leave, vacation leave and other types of leave into a combined "time-off" bank must clearly designate the amount of hours or days of leave which are considered vacation time, as opposed to other types of leave. Employers are also not permitted to enter into agreements with employees under which employees agree to forfeit either earned wages or accrued vacation time.

The Attorney General's Guidelines state that employers are entitled to regulate employee vacations in a number of ways. Employers are free to determine how much vacation, if any, employees are to receive. They may also establish requirements concerning the scheduling of vacations, such as requiring employees to provide prior notice of intent to take vacation. Employers are also permitted to cap the amount of vacation time an employee may accrue. For example, it is permissible to require employees to use vacation time by the end of the year, or lose the right to take that time. However, employers must provide adequate prior notice of the policy to employees, such as in an employee handbook, so that employees have a reasonable opportunity to use their accumulated vacation time before it is forfeited. The Guidelines state "We urge employers to give employees copies of their written vacation policy in advance and to have each employee acknowledge in writing his or her understanding of the policy".

It would be advisable for employers to review their vacation policies and procedures, and make revisions where required to comply with these Guidelines.