Marc A. Mandelman, Member of the Firm in the Employment, Labor & Workforce Management practice, in the firm’s New York office, was quoted in The Washington Post, in “Unlimited Vacation Sounds Amazing. It Can Burn Workers in the End.” by Jena McGregor.
Following is an excerpt:
If you’re laid off from your job or quit to go elsewhere, does your employer owe you the vacation time you’ve accrued?
As with so many things related to employment law, the answer, unfortunately, is “it depends.” And if your employer has an “unlimited” vacation policy, they may owe you nothing at all. …
Marc Mandelman, an employment lawyer at Epstein Becker & Green in New York, counts just eight states that have statutes requiring employers to pay out unused but earned vacation time, including Illinois and Massachusetts, but says most of his clients do it in practice. Industries in which companies compete heavily for talent, such as financial services or technology, are more likely to offer it -- even where it’s not required -- than those that have more low-skilled, low-wage jobs, such as retail.
“Even companies of relatively modest size that are looking to attract and retain qualified workers” do this, he said. “These types of paid leave benefits are a huge factor in recruitment.” …
Yet as more employers have begun offering “unlimited” paid time off policies in which the company suggests workers can take the time they need, rather than be allotted a certain number of days, employees could also lose out. The perk can mean more flexibility and generous vacation time in some cases. But by not defining the number of days employees get off, employers also aren’t on the hook for paying out a certain number of hours when an employee leaves. Nor must they carry over allotted vacation time on their books from one year to the next, which would set up an accounting liability in those states where doing so is legally required.
The rise of state and municipal paid sick-leave policies have also played a part in the increased use of such “nonaccrual" approaches to paid time off, said Mandelman, or as he calls them, “no-cation” policies. For years, he explains, companies have moved toward giving people a bank of paid time off days rather than separate buckets of vacation, personal and sick days. But as states and cities have increasingly passed paid sick-leave mandates, employers have had to expand those PTO banks, swelling the liability employers must carry in certain states.
“It’s much larger amounts of time that employers are entitled to pay out,” he said. “That’s a workaround for these jurisdictions” where employees can carry over accrued time or where employers must pay out what’s unused.