Sign up for the Today newsletter
Get everything you need to know to start your day, delivered right to your inbox every morning.
Taking legal action for a possible error with a company’s payout of vacation time
Pattie Hunt Sinacole shares how employer sometimes calculate unpaid but accrued vacation time, upon separation from a company
Q: Recently I resigned and left my company (February 2025). I gave two weeks’ notice. I had three weeks of vacation time. I had not taken any vacation. I was not paid for the three weeks of time, which I was relying on. Now, I am having financial problems and will be late on my rent. I want to take action against my former company. I was never told that I would only receive a day or so. On my pay stub, it says I get three weeks and on our payroll portal it says three weeks. I feel like hiring a lawyer. This is a big company, and I feel that big companies step on the little guys like me.
Advertisement:
A: First, congratulations on your new job! Any time a candidate lands a new job, that is a good sign for other job seekers. There are opportunities and companies are hiring!
Let me try to explain what I think happened. I am basing my analysis on what you have shared. I am assuming your vacation benefits are based on a calendar year (January 1 – December 31). I agree with you that vacation time should be paid to an employee whether they have resigned, or have been terminated. In your case, you have resigned. Here is where I think there was a misunderstanding. Your former employer is likely paying you only for unused but accrued vacation time. What is on your paystub or payroll portal is likely what you would have earned over a 12-month period, or a full calendar year. Many employers offer employees the time at the beginning of the year, assuming that their employees will take the vacation time during that calendar year. If you had taken a week of time, but not yet earned it, this “overpayment” would likely have been deducted from your last paycheck. Many are surprised that employers are not required to offer vacation time to employees. Most employers offer vacation time, as it would put the employer at a disadvantage with respect to attracting and retaining talent.
Advertisement:
You had probably earned the 15 vacation days assuming that you remained employed for the entire calendar year. I did a rough calculation, again, based on some assumptions. Different employers may have different methods of calculating vacation time. According to my calculations, you would have earned 1.25 days per month. Some employers may require that you work a full month to earn this time. Some employers may require that you work at least until the 15th of the month. Employers are permitted to create their own policies around vacation time.
As an example, let’s assume that you took no vacation time from January 1, 2025, until your last date of employment. Let’s assume that your last date of employment was February 14, 2025. Your calculation would be 2 months worked, divided by 12 months (full calendar year). You would be eligible to receive 2.5 days of vacation time. Your final vacation payment should be 17% of your annual allotment. Again, your employer may calculate it a bit differently, and they may require an employee to work through the 15th of the month, or even to the end of the month. Additionally, if you were a part-time employee, the calculation may be different. Usually, contractors or temporary employees are ineligible for any paid time off.
Advertisement:
Before you consider legal action, I would suggest that you review your company’s vacation policy. Larger employers often have employee handbooks. Employers are required to pay you “all wages due” when you leave the company. How an employer calculates “all wages due” can vary. I have assumed also that you work in Massachusetts. State laws may vary. To review more information regarding vacation pay in Massachusetts, you can visit https://www.mass.gov/info-details/massachusetts-law-about-vacation-leave#web-sources- When visiting the information provided on this site read the two-page advisory that provides more detailed information regarding vacation time and how employers should structure and communication vacation policies.
It is also reasonable to contact your former employer and ask them to explain the calculation. It sounds like perhaps you misunderstood how vacation pay-outs are calculated.
To comment, please create a screen name in your profile
To comment, please verify your email address
Conversation
This discussion has ended. Please join elsewhere on Boston.com