LOA & Vacation Payout-please help

I was hired at a company in MD approx. 4 months ago as the HR Director.  An employee came to me for a second opinion about an incident that occured prior to my employment.  She went out on a medical leave of absence in March prior to her one year anniversary in May.  There was miscommunication and/or loss of documentation b/n the employee and the HR Director about her return date.  The HR Director considered her a voluntary resignation in August (after her "one year anniversary").  According to company policy, if an employee is terminated (voluntarily or involuntarily) after their one year anniversary, they receive a payout of the vacation they have accrued.  The employee did return to work but as a re-hire b/c of the miscommunication/whatever.  She's not completely worried about being considered a re-hire (she was not reinstated), but she didn't receive a vacation payout when she was termed and she feels that she is entitled.  I feel that she should have but I'm not exactly sure; she was employeed for a year even though she was on Medical Leave of Absence at her one year anniversary, she should have been payed out what she accrued up to that date the leave was effective.  Should she or should she not have received a payout?


  • 4 Comments sorted by Votes Date Added
  • According to my sources, MD requires payment of Vacation upon termination. I would say based on that, she should have received a payout.

  • Whether employers must pay employees for accrued vacation time at the time of termination depends on whether the employer has promised to do so, by contract, practice, or policy, and whether, with knowledge of the existence of such a provision, employees start or continue to work for the employer (Dahl et al. v. Brunswick Corp., Court of Appeals of Maryland, 277 MD 471; 356 A.2d 221 (1976)).
  • If I understand correctly, the issue is whether or not her one year anniversary should be honored because she was on medical leave.  I assume that is because her vacation accrual is awarded retrospectively on her anniversary of hire.  If this is the case and you have a practice or policy of paying out vacation time to employees who separate from the company for any reason, then this person needs to be paid.  She was officially an employee at the time that she normally would have been awarded her vacation and the Company failed to award it.  Depending ont he specifics of the condition giving rise to her leave, failing to pay her could be viewed as discriminatory or retaliatory.
  • Thank you TXHRGuy!  That's exactly the information I was looking for.  I really appreciate your help and expertise as well as everyone else who posted!  Thank you [:D]
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