Unused Vacation Time
LLS TN
1 Post
I need help asap. Recently I had to lay off an employee in our small office due to finances. She was two weeks shy of taking her scheduled vacation. Our unwritten office policy is 1 week paid vacation after one year. It has always been our policy that if vacation time was unused it was simply lost at the end of the year. We have never paid for unused time and we have never paid any previous employee for their vacation time when they were terminated or quit. This employee was one of two laid off and they were chosen by being the most recent hired. I have been told by several people that without a written, signed employment contract that address vacation time and the procedure for any unused time, we are not obligated to pay the employee this vacation check. Please anyone who knows if there is an employment law in Tennessee that governs this please let me know. Thanks
Comments
Code Annotated, Section 50-2-102(a)(3) says that the final wages owed to an
employee when he or she quits or is discharged shall include vacation pay that
is owed the employee by virtue of company policy or labor agreement. I read
this as saying that if a company has a policy which says what your policy seems
to say, then you don't have to pay the vacation pay---because that's what the
policy says. It would be better if the policy were in writing, but I don't
think that is a requirement as long as the unwritten policy has been
consistently applied. As far as I know , there has been no litigation under
this statute, at least none that has made its way to a Tennessee appellate
court, and until there is some, the answer you seek will remain somewhat up in
the air. The above is what I think, however.
John Phillips
Editor Tennessee Employment Law Letter
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