Thursday, August 4, 2011

Must Pennsylvania Employers Pay Unused Vacation at Termination?

Piggybacking off of Jon Hyman's post on Ohio Employer's Law Blog, Must Employers Pay Unused Vacation at Termination? It Depends, this post will specifically address Pennsylvania employers. In general, it's up to the employer. But, unused vacation time is considered a "wage" and "fringe benefit" under the Pennsylvania Wage Payment and Collection Law (WPCL).

Why does this matter? Lawffice Space readers may recall that Wal-Mart recently experienced the awesome power of the WPCL. In short, the WPCL allows employees to recover their unused vacation time plus attorney's fees, costs, interest, and sometimes even additional liquidated damages.

But, the WPCL does not create the obligation to pay unused vacation time. Whether such an obligation exists is up to the employer and whatever agreement they reach with the employee. Employers need to be careful to ensure consistency across their communications with employees though.

An offer letter, employee handbook, employment contract, or other communications may indicate that an employee gets paid for unused vacation time upon termination. Any one of those could end up being "Exhibit A" in a WPCL claim if the employer denies the employee vacation pay on termination.

Image: Personal photograph of cruise ship in Alaska... although now that I think about it, this post is about unused vacation time. Oh well.

Posted by Philip Miles, an attorney with McQuaide Blasko in State College, Pennsylvania in the firm's civil litigation and labor and employment law practice groups.