Use or Lose Vacation???

atherese

Our company is questioning why we don't have the policy "use or lose" accrued vacation. My understanding is that in Minnesota we are not able to, but I can not find anything in writing.

We also currently only allow banking vacation up to the current level we earn at, ie. only can have 4 weeks available if earning at 4 week level, only 3 weeks available if earning at 3 week level, etc.

Curious as to what your policies are about how much vacation time can be banked at a time.

Parabeagle

We have a use-it-or-lose-it vacation policy. Each anniversary an employee is awarded his/her allocation of vacation days and they must use all the days prior to their next anniversary. Any days remaining are lost if not taken. The only time vacation accrual enters the picture is if the individual terminates during the year, in which case the individual is paid for any unused vacation days.

I don't know about your state, but in Oregon you can have a use-or-lose vacation policy so long as it's communicated to the employees just as you would any other policy.

Gillian

The key to your question is what does Minnesota regulations require. Most states allow "use it or lose it" policies. Mine, California, does not and any unused vacation must either be paid for or rolled over.

JulieJulie

Where can I go to find laws on Use or Lose vacation for different states online?
I am new to HR and our company is located in multiple states.
Thanks.

Parabeagle

I work for a multistate employer as well. It's not online, but one guide I have found very useful for quick questions like these is called the US Employer's Guide. (I hope this isn't a commercial for them). Proves really handy for getting quick answers to common issues.

JulieJulie

Where can I find this guide?
Thank you.

Trinity

We also have a use it or lose it policy. The employees have their weeks allotted to them based on their tenure with the company and if they don't use it by the next anniversary year, they lose it. We do have one exception in that , with the expressed written approval of the President, an employee may carry over one week of vacation for special circumstances.

WITracy

When I was working in MN this issue came up. Our attorney explained that if the vacation time is accrued, it is considered an earned benefit & must be paid out at the time of separation. If you give someone 2 weeks every Jan 1st or on their anniversary, then it's considered a "gift" and you are allowed to implement the use or lose clause. This does not apply to sick leave, which you do not have to pay out.

This also applies to "carrying over" time. Meaning, if you have a cap of 4 weeks and if the employee has a balance at year end or their anniversary (whenever you designate) you have to pay out the balance vs. them losing it.

Hope this helps.

Theresa Gegen TX

You can try contacting you state wage and hour division of the State Employment Agency. Most states have ones that can provide you with simple answers to these type of payroll questions. You also might look at the agencies website (often they will have a Q and A portion for these types of recurring questions).

Good Luck!

sandra_d

I too work in MN, and in the past had an employment law attorney advise me that accrued vacation is earned and payable to the employee. However, I have subsequently had a very prominent attorney tell me that she argued a case in front of a judge, and won, where accrued vacation was not due an employee. Pretty confusing!! It so happens that about 18 months ago, I was on hold with the Minnesota Department of Labor, calling to ask their opinion on this very issue, when their recorded message said something to the effect of, "accrued vacation is not necessarily due to an employee ... the employer must follow their policy, so if their policy says that it is due to the employee, then it is. However, if the employer's policy says that accrued vacation is lost (at termination, when not used, whatever) then it is lost." Basically, whatever you want your policy to be, as long as you follow it for everyone, it is fine.

durasupreme

We're also in MN - our policy states that carryover of accrued but unused vacation is limited to the amount that can be accrued in the prior year, and vacation accured in one year MUST BE USED prior to your anniversary date of the following year. The company I worked for previously (also in MN) had a similar policy, stating that any accrual in excess of one year's accrual on January 1 is automatically forfeited. Minnesota Law DOES permit the "use or lose" rule, if the employer's policy so states.

Patti

I believe you have to follow the state where your corporate office is located. At least that is the way we did it. We had a use or lose vacation policy, which was told to the new employee at orientation and backed up by the handbook. The only exception was written approval by the president/CEO. This happened several times to upper management, because of the time element. They were allowed to take unused vacation in the first 6 months of the following year.