Being terminated from your job can be overwhelming. When you are fired and your employer refuses to pay you for your unused vacation and sick time, you might wonder whether you have the right to recover compensation for these benefits. While employers in New Jersey and Pennsylvania are not required to pay your unpaid vacation and sick time when you are fired for cause, they may have to do so if your former company has a policy of allowing workers to accrue vacation and sick time and to cash the hours out. The employment law attorneys at Swartz Swidler can review your situation and explain the options that you might have.
Who is eligible to be paid for their unused leave?
There are no requirements for employers to pay employees for unused leave under federal law. While some states do have requirements for employers to pay their employees the unused vacation or sick time that they have accumulated at the time that they are terminated, New Jersey and Pennsylvania do not have any requirements for employers to do so. However, many employers have policies in place to pay terminated employees for their unused leave. When an employer has this type of policy and has had a practice of paying terminated employees for unused vacation and sick leave, the company’s policies and practices establish a contract with the employees.
Right to payment for unused vacation time in New Jersey
The employment laws of New Jersey do not require employers to pay terminated employees for their unused vacation time. However, when an employer has established a policy under which employees can earn vacation time, they may be entitled to be paid for their unused vacation time when they are terminated.
In this case, the policy or practice of paying employees for vacation time forms a contract with the employees and is an employment benefit. Most companies have policies that allow employees to accrue paid vacation hours. The policies might also discuss how unused vacation time will be handled when an employee is fired. If your company offers you a severance package when you are terminated, you should ask to be paid for your unused vacation time on top of any severance amount that you are offered.
Right to payment for unused vacation time in Pennsylvania
Like New Jersey, Pennsylvania does not have a law requiring employers to pay terminated employees for their vacation time. However, if an employer has an established policy for vacation time, it must adhere to the terms of that policy. If an employer has a policy and practice of paying paid vacation time, the employer must pay a terminated worker for the unused vacation time that has been accrued at the time of the employee’s separation. If there is no policy, an employer will not be legally required to pay the employee for his or her unused vacation time.
Right to payment of unused sick time
Like your vacation time, there is no law in New Jersey or Pennsylvania that requires employers to pay terminated employees for their unused sick time. However, if your company has a policy in place that allows workers to accrue paid sick leave days, you might be entitled to be paid for the time that you have accrued after your separation.
While employers are not required to provide paid sick leave or vacation leave to their employees, most employers do. When they have policies that allow employees to accrue leave and regularly pay employees their unused leave at the time of their separations, employees who are terminated should be paid for their unused and accumulated leave.
The importance of understanding your employer’s pay policies
Since New Jersey and Pennsylvania do not require employers to reimburse employees for unused leave at the time that they are terminated from their jobs, it is important for you to understand the pay policies at your company. Check your employee manual and read the policies about accruing sick and vacation time. You will also want to check if the leave is paid or unpaid and whether your employer has a policy for how accrued leave is handled when employees are separated from their jobs.
Most employers have explicit policies and procedures for how accrued leave is handled. If your employer has a stated policy that unused but accrued leave will be paid to employees when they are terminated, your employer must follow that policy if you are fired. In other words, if your employer routinely pays other employees for their unused leave at the time that they are separated from their jobs, you must also be paid for your unused leave unless your employer’s policy states otherwise.
Employers are free to decide what type of vacation and sick time schedules they want to use. They can also decide not to offer vacation or sick leave to their employees. Some employers allow employees to accrue a set number of hours per pay period while others provide a block of paid time off to each employee each year. Employers are also allowed to place a limit on the amount of vacation and sick days that employees can accumulate.
If you have reviewed your company’s policies and still have questions about how vacation and sick leave are handled, you should talk to your supervisor or the human resources department at your company.
Talk to an employment law attorney at Swartz Swidler
While employers are not legally obligated to provide vacation or sick leave to their employees or to reimburse terminated employees for their unused leave, you might still have the rights to be reimbursed for your leave. If your employer has a policy in place under which employees should be paid for their unused leave when they are separated from their jobs, your employer may be in violation of the employment contract it has established with you through its policies. For help, contact the employment lawyers at Swartz Swidler by calling us at (856) 685-7420.
