Is Vacation Pay Required for Terminated Employees?

criddle

I'm in Missouri and we're looking at changing our vacation policy to state that if terminated then not eligible to receive accrued vacation payout. Are we prohibited from any federal or state law from doing this and/or can you list reasons why we would not want to consider this change? Thanks for your input.

Dutch2

Went to MO.gov and quickly found the following:
Termination of Employment and Final Wages
Missouri follows the Employment-At-Will doctrine. This means that both the employer and employee can terminate the employment relationship at any time and for any reason, as long as there is no employment contract to the contrary, there is no discrimination under civil rights laws (based on race, color, age, national origin, religion, ancestry, sex, or physical/mental disability), no merit laws apply, or the state’s limited public policy exception does not apply. If you feel you have been discriminated against while on a job or while applying for a job, you have the right to file a complaint with the Missouri Commission on Human Rights.

Employers are required to pay a discharged employee all wages due at the time of dismissal. State law does not require payment of earned vacation time at the time of termination. However, an employee has the right to attempt recovery of earned vacation time through the courts.

ACU Frank

That's an absolute no-no here in Missouri.

SpartanFan

I never understood why so many HR collegues support the payout of unused vacation (in states that don't mandate it) when termination for cause or resignation occurs (layoffs excluded). Vacation is a benefit of employment - not non-employment. If an employee resigns or is fired for cause, why treat vacation as additional earned compensation??Vacation is a benefit of TIME away from work, not additional pay beyond that and should in no way be treated as some earned right to be compensated when the employment relationship ends. I've heard all the bleeding heart arguments about employees earning some "vested right" to be paid for not taking time off, but such arguments ring hollow and are completely contrary to the reason for offering vacation benefits in the first place...to allow employees to take some time away from work as a method of relaxation, family time, or personal reasons. But when you leave my employ, either voluntarily or due to performance, we should NOT advocate that such employees be provided cash while they exit our organizations, just because they did not utilize the benefit that was provided while they were employed...

ACU Frank

I support it because the law [B]requires[/B] it.

tmperry

For once, I like living in West Virginia! Our law states all Vacation and Sick time is considered a gift of the company and therefore payout is determined by policy. However, we are cautioned as to how we write our policies to ensure it's clearly stated that it's a gift and to stay away from phrases like "employee will [B]earn[/B] x amount of hours annual leave a month" because the term earned makes it seem like the employee has earned the time and is now owed it and we could end up paying out in court!