Deciding to leave a job presents a certain level of financial anxiety for most people, even if you’ve lined up a new job before you leave. You’ve got to plan for expenses that come up between your last and next paychecks, plus you'll want to make sure you get all the vacation pay you've worked hard for. There's little government oversight for vacation pay when workers quit, so you'll need to review a few sources to determine if your employer needs to pay out your benefits. When possible, make a plan for securing your vacation pay before you quit your job.
In most cases, the U.S. Department of Labor doesn’t impose or enforce federal rules concerning vacation pay. This means another authority determines if employers must award vacation hours, and whether an employer must pay you the vacation time if you quit.
Most states don’t require employers to provide vacation benefits to employees, but if an employer decides to offer vacation pay, most states enforce the employer’s policy. The state Department of Labor can assist you in collecting any earned or accrued vacation pay if your employer fails to pay out the benefit after you quit.
Your company handbook is your best resource for determining if you’re entitled to vacation pay when you quit. Many employers allow workers to cash out accrued vacation hours when employment is terminated, so you’ll want to review the policies of your company before making a decision about your quit day. When reviewing your company’s policies, you’ll need to distinguish the types of benefits you’re entitled to. Some companies offer more than one type of benefit, such as sick pay, vacation pay and paid time off, or PTO. If your company lists each type of benefit separately, it may also impose different rules about the types of pay you’ll receive if you quit. Some employers also lump all your paid days off as PTO.
If you feel your vacation pay is in jeopardy, use your vacation days before you quit. Some companies require you to put in a notice to receive the vacation pay and others may pay all your earned hours regardless of whether you put in a notice. Take a copy of the employee handbook home so you’ll have proof of the company’s policies in case your employer doesn’t pay you and you need to file a claim for vacation hours. Some state Departments of Revenue process claims for unpaid vacation pay. If your Department of Revenue does not, you'll need to file a small claims suit in court to get your cash. Vacation pay is subject to withholding taxes, so plan to have a little less than the gross value of your vacation benefit -- regardless of whether your employer pays you directly or you win damages through a claim for unpaid benefits.
- U.S. Department of Labor: Work Hours - Vacation Leave
- California Department of Industrial Relations: Division of Labor Standards Enforcement - Vaction
- Colorado Department of Labor: Vacation
- Oregon: Technical Assitance for Employers - Holiday and Vacation Pay
- South Carolina Department of Labor: Frequently Asked Questions
- Ciaran Griffin/Lifesize/Getty Images
- How Does It Affect Your Credit When You Pay Off Debts?
- Can a Judge Make Me Pay a Credit Card Debt?
- Does Being a Co-signer on Someone's Loan Prevent You From Getting One?
- Does the Payoff of HELOC Early Affect Credit?
- Does Being an Authorized Signer Affect Your Credit Report?
- Four Types of Charge Accounts
- Who Pays for the Entertainment at a Wedding?
- How to Finance a Home With a Co-Signer
- What Does Financially Self-Sufficient Mean?
- Difference Between Incurred Expenses & Paid Expenses