Vacation Payout Upon Layoff

[genalewis]

What is the name of your state (only U.S. law)? Indiana

I am asking this question for verification only, as I believe I already know the answer. Indiana does not have a law requiring employers to pay vacation earned upon laying off an employee, correct?

My husband was recently laid off after 7 years with his company, and they only paid out 2/3 of his vacation. I thought it was pretty classless (though not surprising), but from the information I have found thus far, it seems he was lucky to have received anything.

Thank you for your help.

[pattytx]

Not exactly.

When I leave my employment, is my former employer required to pay me for any accrued vacation time?

Yes. Accrued vacation pay is considered a form of compensation. Upon leaving employment, vacation pay is additional wages, earned weekly, where only the time of payment is deferred. As a result, an employee is entitled to a pro rata share of his/her accrued vacation at the time of termination.
However, if there is a company personnel policy or employment contract which states certain conditions under which accrued vacation pay will be given upon termination, the employee must meet those conditions in order to receive their accrued vacation pay. These policies are at the discretion of the employer, but must be presented to the employee in writing prior to the ending of employment.

[url=http://www.in.gov/dol/2345.htm[/url]

[genalewis]

Thank you. He did receive his pro-rated vacation balance, so this helps me feel a little less bitter.

[pattytx]

Just to be clear, when you say 2/3, what exactly do you mean?

[genalewis]

He was paid for approximately 2/3 of his vacation balance. Apparently, they figured how many hours he'd worked in the year, then figured how many hours of vacation he earned from this, and paid this amount. I guess his vacation had been awarded in advance at the beginning of each year that he worked for the company.

[pattytx]

OK, then that would be correct, assuming he had no untaken vacation carryover from the previous year.

[eerelations]

If he'd worked 2/3 of the year then he was paid out ALL of his vacation balance. Most (and probably all) employers accrue their employees' vacation time, and many employees don't quite get this concept.

So when the employer says "this year you will have 10 days' vacation" the employee takes this to mean "you have 10 days' vacation in your vacation bank right now" when the employer really means "you will accrue 10 days' vacation over the course of this year" - and this misunderstanding causes problems when employees are let go.

If your husband's former employer is at all like most employers with regard to vacation time and pay, then your husband was actually paid out in full.

[pattytx]

As I said, IF he didn't have any carryover from the previous year.

[eerelations]

Agreed. I was still typing when you said that.