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What happens to unused vacations?

Many were unable to cancel their vacation or take a vacation during a pandemic. My company has a policy of “use or lose it”, but not everyone can take off from now until the end of the year. What happens to unused vacation days?

Employees and managers across the country are facing year-end calculations for unused paid leave. Labor laws that manage sick leave and vacations may vary from state to state and even from city to county. Most states allow a “use or lose” policy. Under this policy, employees lose vacation days left unused at the end of the year. However, a few states impose restrictions on such policies or ban them altogether. Make sure your company policy complies with local labor laws.

We still have time to make changes this year, and many companies are reassessing their PTO policies in light of the pandemic upheaval. Given the unusual situation of Covid-19, your company may be willing to consider individualized responses to regular policies, company-wide temporary policy changes, or other solutions. Hmm.


Wayne Outten, chairman of New York’s employment law firm Outten & Golden, states that there is a legal distinction between sick leave and vacation. “There is no federal law that requires you to pay vacations, so it’s important to understand the laws of the state you’re in,” he says. Employees worried about unused vacation days should start by looking at state and local labor laws and reading existing company policies.

Please check the fine print. “This is the” peak season of the handbook. ” Employers need to review and support their policies for 2021, “said Deidra Nguyen of San Diego-based employment attorney and professional law firm Littler Mendelson. In management expression.

With so many employees switching to working from home this year, she says employers need to be aware of the laws of where the work is done, regardless of where the company’s offices or headquarters are. Says.

She says some policies contain words that can be interpreted. For example, some jurisdictions allow employees to have “reasonable opportunities” to take vacations during the year, but only if they do not, they allow the confiscation of vacations that occur.

At what point do travel restrictions, infection risk, distance learning, and forced quarantine deny reasonable opportunities? “When someone said I canceled my vacation because of a pandemic, I stepped lightly there,” says Nguyen. “Think about how the jury sees it.”

She says most of the clients she recently heard are considering a one-time grace period for 2020-21 rather than a permanent policy change.

For example, a company that has a use-it-or-lose-it policy may be allowed to carry over vacation days to the next year. Companies that typically allow a one-week rollover are considering extending it to two weeks. Other companies that typically need to use rollover dates in the first quarter have extended the period to the second quarter, she says.

Employees who wish to pay for unused vacation days can be disappointed. Such conversions are restricted in some jurisdictions, and year-end cash outlays may not be compatible with the company’s financial position.

“It comes down to a shade of generosity,” says Nguyen. “In reality, do you think employees will have ample and fair opportunity to take advantage of this vacation in the first quarter, or will it take longer? There are plenty of crystal balls.”

It’s important for managers to make sure that the changes aren’t retroactive and have potential, she says. “I don’t want to pull the rug underneath a person,” she says. “Communication is the key. Just tell us what they can expect and why the company is making changes.”

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