VACation Leave – A Workplace Policy Employers Should Adopt

A vacation, is a period of absence from a particular routine or job, for the purpose either of personal relaxation or recreation. People frequently take a vacation either for special occasions, such as on holidays for New Year’s, Valentine’s Day or Easter, and on certain holiday observances. Vacations may also be spent with family or friends. However, it is not unusual that most people’s plans for vacations change somewhat depending on the timing of their employment.


There are many situations where the need to take a vacation often arises. For example, most businesses operate on a seasonal basis and require employees to be away from work for at least two weeks every twelve months. If an employee is required to take a vacation even though he or she has already taken annual leave, the employer may cite this situation as an example of an employee exceeding the period allowed for annual leave. On the other hand, if the employee only needs to take a vacation for two weeks each year, there may be no reason to excuse the absence on the basis of the seasonal nature of the business. For these situations, employers are not required to give their employees any notice that they will be absent for a vacation.

It is fairly common for businesses to pay their employees for vacation days but many employees do not understand the legal implication of this practice. An employee who takes a vacation and is then fired because of that vacation can bring a claim for unpaid vacation days against the employer. The U.S. Department of Labor states that “any employer who allows an employee to take an extended vacation instead of an agreed upon number of days is an employer who may well be practicing discrimination in violation of the rights of employees,” and can be fined if the discrimination continues. In addition, the employee may also recover additional compensation for lost wages and pain and suffering.

Vacation pay is most often provided to employees whose work is performed four weeks or less per year, including holidays. However, there are employers who may pay their employees for more than four weeks of vacation time each year, including annual vacations, sick leave, and vacation pay that is owed but never received. Some employers have been sued for not paying their employees for vacation pay when they were supposed to be receiving it. These lawsuits are ongoing.

When an employee receives vacation pay but fails to use the entire amount owed, the employer is in violation of the Fair Labor Standards Act (FLSA). If the employer does not make reasonable accommodations for an injured employee, the employee may file a lawsuit for wrongful termination. If the employer pays the employee’s wages, including vacation pay, but refuses to allow the employee to take the entire vacation that was owed, the employer commits a violation of the Fair Labor Standards Act. In addition, an employer who pays an employee only for two weeks of vacation time may be liable for monetary damages under the FLSA.

A final option for employers providing paid vacation days is to require their employees to exchange their annual leaves for vacation days. This is referred to as “year-off”. An employee must surrender his or her accumulated annual leave prior to beginning the year off policy. If the employee does not surrender the accrued annual leave, but uses up all of the unused vacation days, the employer must provide appropriate compensation for this use.