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News & Insights

Do I Owe My Employees Accrued Vacation at Termination?

 

By Laura L. Rubenstein, Esq.

Wright, Constable & Skeen, L.L.P
September 13, 2017

One of the most common questions employers ask me is – What do I owe my employees in their final paycheck? Employees must be paid for all hours worked, including any overtime pay and earned commissions. But what about accrued vacation or other paid time off (PTO)? Maryland law states that a company’s written policy communicated to employees at the outset of their employment governs whether vacation or other PTO must be paid to the employee at termination. Having a carefully crafted handbook policy is important if a company wants to withhold accrued PTO from an employee who was justifiably terminated, e.g., engaged in harassing conduct of a subordinate employee. Importantly, Maryland law provides that when a company’s policy is silent or nonexistent, it defaults to the rule that the company owes the money for the accrued vacation or PTO.

Now is a great time to check your Employee Handbooks to know what your company policy says and to consider whether you should change it based on your company’s philosophy or a recent situation that left you paying out for more than expected.

For questions on this issue or any other employment policy, please contact Laura Rubenstein at lrubenstein@wcslaw.com or 410.659.1347.

 


 …ABOUT LAURA

Laura Rubenstein

Throughout her year legal career in Maryland and D.C., Laura Rubenstein has spent countless hours counseling local and national employers on all aspects of workplace legal issues. She represents businesses and nonprofit organizations in a wide range of matters, including investigating sensitive and confidential employment claims, negotiating employment and severance agreements, defending harassment, discrimination and retaliation claims and handling wage and hour lawsuits.

Laura represents clients before administrative agencies including the DOL, EEOC, NLRB, OFCCP, DLLR, among others. She listens and counsels on how to address workplace accommodations, employee theft, workplace violence, and leaves of absences and negotiates and drafts documents critical to the client’s individual needs. In addition to her support of many non-profits, including sitting on various Boards and committees in the community, Laura is an accomplished speaker, writer and is a certified mediator.