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I have given my notice at my current company but I realized that I have over a years worth unused vacation time.

Is it a standard practice for an employee to be compensated for unused vacation time when leaving a company?

I realize this question might be subject to local so if needed I can change it to be more specific for USA or even more specific to California as is my current case.

closed as too localized by jcmeloni, Jim G., CincinnatiProgrammer, gnat, Monica Cellio May 21 '13 at 21:32

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    Related: workplace.stackexchange.com/questions/4529/… – MrFox May 21 '13 at 17:23
  • Technically, this is a legal question, so I imagine some close votes might be coming. However, it seems likely to be of broad interest and the answer is (sort of) general knowledge, so I think it can be kept open. – GreenMatt May 21 '13 at 17:54
  • This really varies widely by company, as others have noted. I am personally in the middle of re-evaluating my company's policy on this, and we have many different ideas all equally legal according to our HR rep (I offer this as an example of the wide range of possibilities). – jcmeloni May 21 '13 at 17:58
  • The Department of Labor requirement to pay for unused vacation time is only for situations where the vacation time is accrued as you work. If the time is awarded as a lump sum(like at the beginning of the year or on your anniversary date) then the company is not obliged to pay out unused vacation days unless they are contractually obligated. I would post it as an answer but the amount of links required to back it up makes it to tedious... – IDrinkandIKnowThings May 21 '13 at 18:37
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United States' law does not establish any precedent in this area, so it is up to the individual states to set the legal environment. That said, as others have noted, this usually depends on the employer's policies and/or your employment agreement.

In my experience (25+ years in technical jobs), unused vacation time is usually paid out when you leave a job. However, as mhoran_psprep's answer indicates, many employers set some sort of maximum on the amount you can accumulate or how much you can carry from one calendar year to the next.

A quick web search turned up a write up summarizing California law for this issue. Generally, the law views vacation time as part of your wages, so you would be paid for it upon leaving. However, this can be modified by a collective bargaining agreement. Question 10 on that page specifically addresses this issue.

  • As a curiosity, laws vary per country too. Back in my place, accumulating holidays is a courtesy, as the law states 1) by law you are obliged to used at least 3/4 of the time to prevent employer abuse; 2) You will have a clean slate from last year holidays at 1 of March. It is either use it or lose it. – Rui F Ribeiro Jul 7 '17 at 6:34
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There is no standard policy for this:

  • Some companies will write a check for the whole amount.
  • Some will cap the amount of the check at X hours.
  • Some will delete any amount above X hours at the end of each calendar/fiscal year.
  • Some will write a check for any hours over X at the end of each calendar/fiscal year.

You will have to talk to HR, or look at your policy documents from HR.

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Start with your employment agreement - that's where the company will have documented their policy. Then ask HR. This has to be dealt with by them, and they'll know the rules.

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