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Do I have to pay a quitting employee her unused vacation and sick hours?
I have an employee who is leaving my small business. She did not give me adequate notice and she is insisting that I pay her her unused vacation and sick hours. Is this something I have to do?
Asked by anonymous
Posted: Thursday, September 13, 2007 | Found in Human Resources
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Federal employment statutes and most state employment laws do not require that companies pay for vacation or sick time. You can check your own State Department of Labor website to see if your state has anything of that nature in force. It probably will not.
Then, you should check your own employee handbook. What does it say in regard to payouts on vacation and sick time in the event of termination?If it indicates that the departing employee is paid for accrued, unused vacation and sick time, you are kind of stuck in this situation. However, live and learn. Change the policy to reflect that payouts of accrued, used vacation and sick time upon termination will be at management discretion and depend on the circumstances; for example, resigned giving sufficient working notice (i.e., the employee works throughout the notice period and does not resign and then try to use vacation or sick leave for his/her notice); leaving in good standing (e.g., having paid all outstanding amounts owed to the company, having returned company property, etc.)
Another thing to consider is your own company's precedents. That is, if the company normally pays accrued, unused vacation and/or sick time regardless of circumstances, and you decide not to do it in this one instance, you may receive an EEOC claim alleging that sex, age, creed, or race was the reason for your decision.
Penny is a seasoned human resources executive and consultant with over 25 years of diverse business experience in advising enterprise leaders on employment-related matters.
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