The following question was submitted to John Roska, an attorney/writer whose weekly newspaper column, "The Law Q&A," ran in the Champaign News Gazette.
Does my employer have to pay me for unused vacation time when I leave work?
Probably. There are ways around it, but under the most common vacation policies, you’re entitled to be paid for the unused vacation in your final paycheck.
Vacation time—paid or unpaid—is not required by any US law.
It’s simply provided out of the goodness of an employer’s heart, or a desire to keep up with the competition.
Countries in the European Union must provide at least 20 days of paid vacation per year.
About 75% of US employers do voluntarily provide some paid vacation, to about 90% of full-time workers. When provided, vacation pay is covered by the state, and not federal law.
The state law that applies is the Illinois Wage Payment and Collection Act. The Act applies to employers that have 4 or more employees. Very simply, it's designed to make sure that employers pay workers what they’ve earned.
That Act says that “final compensation” includes “the monetary equivalent of earned vacation and earned holidays.” It goes on to say that final compensation must be paid “in full, at the time of separation, if possible, but in no case later than the next regularly scheduled payday for such employee.”
So, if you quit, are laid off, or get fired, your final compensation is supposed to be paid on or before your very next payday.
The law specifies that “whenever a contract of employment or employment policy provides for paid vacation,” then “the monetary equivalent of all earned vacation shall be paid” to anyone who resigns or is terminated. (Somewhat obviously, this law doesn’t apply if you’ve already used all your earned vacation.)
And, to drive home the point, the law says that no employment contract or policy “shall provide for forfeiture of earned vacation time upon separation.”
Few workers have written employment contracts. But, as mentioned above, many are covered by some kind of paid vacation policy. Those policies are often in writing but don’t have to be. An unwritten policy can be established and enforceable simply by custom and practice.
Most policies are “length of time” policies, where vacation days accumulate over time. For example, you may get 2 weeks paid vacation after 12 months, or earn a certain number of hours of vacation time per month.
Under these “length of time” policies, you earn vacation for past service, just like you earn your regular wage. So, with these policies, the law applies and requires your employer to pay you for unused vacation time upon your separation.
The Illinois Department of Labor says you get paid for a pro-rata share of earned vacation, even if an employer’s policy says you don’t. For example, if a policy says 2 weeks vacation, but only after 12 months, you get paid a week’s unused vacation if you leave after 6 months.
For information about filing a claim with the Illinois Department of Labor, call (312) 793-2800.
Editor's Note: The Wage Payment Collection Act also says that your employer must pay you the wages they promise to pay you. If your employer has not paid you the amount they promised, it is wage theft.
Updated: March 2018