July 30, 2018
In the midst of this recent summer heat wave, many employees are itching to take their vacation time and soak up the sun with friends and family. However, the laws surrounding vacation benefits in Massachusetts can be confusing, leaving many unsure of how to optimize time off. However, the Attorney General’s advisory on vacation policies can provide guidance on establishing policies surrounding vacation time.
Unfortunately, in Massachusetts, an employer is not required by law to provide employees with vacation benefits. If an employer does ultimately choose to provide benefits, either paid or unpaid, they must comply with the terms of the employment contract or established company policy. To avoid any confusion as to what specific benefits are offered to employees, it is recommended that employers provide a copy of the written vacation policy in advance and have the employee acknowledge his/her understanding with a written signature.
If an employer does choose to provide paid vacation benefits, the employer must treat those payments like any typical wages under M.G.L. c. 149, s. 148. As such, employees must be paid for the accrued or earned leave upon separation from employment, regardless of the reason for leaving or termination (MA Atty. Gen. Advisory 1991/1.) Withholding vacation payments is equivalent to withholding wages and, hence, is illegal.
An employer also has the power to cap the amount of vacation time an employee can earn or accrue. One of the common variations of an accrual cap is the policy known as the “use it or lose it.” This policy states that employees must use their accumulated vacation time by a certain period or lose it all. While some policies allow the employee to “carry over” some vacation hours after the expiration of the designated time period, the “use it or lose it” policy effectively caps accrual of vacation time for employees. However, the employer is required to provide adequate prior notice of the policy and ensure that the employees have reasonable opportunity to use their accumulated time within the time limits as established. If the employer fails to do so, this accrual cap policy could result in an illegal forfeiture of wages.
If you have any questions or need representation for any issues surrounding wages, employment, or termination, please call the Boston Bar Association’s Lawyer Referral Service at 617- 742- 0625 or connect with an area attorney online.