Under Massachusetts law, you are required to pay him any and all vacation time that he has actually accrued on the last day he works. If he has a week's time accrued, then yes, you legally have to pay it to him, regardless of the reasons of his termination. If he does not have a week's time accrued, then you don't. You don't have to pay him what he would have accrued over the remainder of the year, only what he has accrued up to now.