The Ins and Outs of Vacation Pay Per Massachusetts Law

Vacation Payout Requirements Under the Massachusetts Wage Act

Is my employer required to provide vacation time under Massachusetts laws?  

According to Massachusetts law, employers are not required to offer vacation time or paid time off ( “PTO”) to their employees. Many of them do, of course, as employees have come to expect vacation time as a benefit and will likely look elsewhere for work if it is not offered.

Is my Massachusetts employer required to pay out unused accrued vacation time or PTO if I quit or my employment is terminated?

Employers that offer vacation time or PTO must treat vacation time consistent with the requirements of the Massachusetts Wage Act because, according to that law, vacation time is considered “wages.” As a result, upon separation from employment, employees must be compensated by their employers for vacation time earned and unused under an agreement, whether written or oral.

In short, Massachusetts employers must pay out any unused accrued vacation time along with your final paycheck whether you quit or your employment is terminated.

According to Massachusetts wage and hour laws when does my employer have to pay my final paycheck and pay out any unused accrued vacation time or PTO?

If you quit or resign from your job, your final paycheck is due on the next regular pay date. This final check should include any wages that are owed to you. If your employer has a paid vacation time policy then the final paycheck must include any unused accrued vacation time.

If you are fired or terminated from your job, your final paycheck is due on the date your employment ends/date of discharge. Once again, this final check should include any wages that are owed to you. If your employer has a paid vacation time policy then the final paycheck must include any unused accrued vacation time.

For example, if you are provided with 2 weeks of paid vacation per year and quit your job mid-year, you are entitled to be paid for 1 week of vacation, assuming you had not taken any vacation at the time you quit. That payment must come to you as part of the next regular pay cycle. Unused vacation must be paid to you on the very same day you are terminated if your employment ends involuntarily.

Can my employer refuse to let me use my PTO and/or vacation time?

Employers are entitled to set terms and conditions regarding the use of PTO or vacation time, including not allowing employees to utilize that time until they satisfy a probationary or trial period. Employers can also dictate the amount of vacation time an employee may take and can require that the allotted time be accrued over time (e.g., a certain amount of hours per pay period).

Employers may not deny use of PTO or vacation time as part of a pattern of unlawful discrimination or retaliation, such as denying use of PTO or vacation time because of someone’s race or because you complained about unlawful behavior. Learn more about unlawful workplace retaliation here.

Are “use it or lose it” vacation policies legal under Massachusetts wage and hour laws?

Yes, Massachusetts employers may enforce a policy that prohibits employees from rolling unused vacation time forward to subsequent years. Known as a “use it or lose it policy,” this policy requires employees to use vacation time in the year in which it was accrued or lose it forever.

In short, if your employer offers you paid vacation, it must be treated as wages for purposes of the Massachusetts Wage Act. This means that upon separation of employment, your employer must pay you for all unused vacation time that you have accrued at the time of separation.   

Are you not getting the vacation pay you are owed? Steffans Legal serves employees across Massachusetts from our offices in Worcester, Lowell, Springfield, and Hyannis. Contact Steffans Legal today for a free consultation.  

ADDITIONAL TOPICS IN MASSACHUSETTS AND FEDERAL WAGE AND HOUR LAWS

Click a topic below to learn more

• Do employers have to reimburse mileage?

• Do employers have to pay for travel time?

• Do employers have to pay for training time?

• Do employer have to pay for on call time?

• Do employers have to reimburse employees for uniforms?

• Do employers have to pay for time spent donning and doffing uniforms and PPE?

• Do employers have to pay for: Sleep Time, On Call Time, Off-the-Clock Work, and Breaks/Lunch Breaks?

• Massachusetts Laws Regarding Server Minimum Wage, Tips, Tip Pools, and Service Charges

• Are Commissioned Employees Entitled to Minimum Wage and Overtime Under Massachusetts Law?

• Are Commissions Covered by the Massachusetts Wage Act?

• Massachusetts Independent Contractor Law

• Massachusetts Blue Laws – Premium Pay for Sundays and Holidays

• Massachusetts Minimum Wage and Overtime Laws