Laid-off employee must be paid for unused vacation time

An employee who was laid off from his job is entitled to be paid for any earned but unused vacation time, according to the Massachusetts Supreme Court. The worker in this case was terminated after 21 years on the job. Under the company’s written policy, he was entitled to five weeks of paid vacation each calendar year – but he wouldn’t be reimbursed for unused time if he were laid off. According to state law, laid-off employees must be paid any compensation they have earned up until their last day of work. The employer argued that the employee hadn’t “earned” any vacation pay because of the terms of its policy.

But the court sided with the employee. It said the state wage laws are meant to protect employees’ right to wages, and they wouldn’t have any teeth if employers could simply create policies that negated the rules.Laws vary from state to state on this issue. We’d be happy to help you if you have any questions about what compensation is due at the time of a layoff.

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