Employers Should Carefully Define Terms of Vacation Policy and Accruals

Employee handbooks should clearly specify the rate of accrual and conditions for earning paid vacation time, as highlighted by the New York State Appellate Division decision in Linwood v. United Activities Unlimited, Inc.

In Linwood, the employer had a policy of paying employees for accrued and unused vacation at the time of termination, but its employee handbook did not specifically address the “vesting” or accrual rate of vacation days over the course of the calendar year.  Thus, a former employee sued claiming she was entitled to her entire annual vacation entitlement, and not just a pro rata amount based on her termination date.  The court in Linwood disagreed, and found that the employee did not establish that she was entitled to anything other than payment of unused vacation on a pro rata basis.

To avoid similar litigation and/or potential liability, we recommend that employers carefully review their policies and confirm that any employee paid time-off benefits and accruals are clearly defined and unambiguous.

Linwood v United Activities Unlimited Inc

~Submitted by M Monroy

Categories: Employment Law