Employees can lose out on a good chunk of money by not claiming vacation pay that they are owed when they leave a job. People might assume – or are wrongly advised by their employers – that they are not entitled to their unused vacation. Your boss might say that you haven’t been working long enough, or have some other excuse, but it’s not necessarily true.
According to the Illinois Wage Payment and Collection Act, if your employer provides paid vacation, then they must pay you for any unused portion that you have earned by the end of your employment. Employers are required to give you your final paycheck on your last day of work, if possible, and certainly no later than the next scheduled pay day. This final check should include any vacation pay you are owed.
An employer cannot have a policy that says you lose unused vacation upon termination. So whether you quit, resign or get fired, you should get paid for vacation time you have accrued. Note that the law does not require employers to offer paid vacation time in the first place, so if your employer doesn’t, then these rules don’t apply. Also, different rules may apply to union contracts.
Sometimes vacation is awarded all at once, at the beginning of the year or at a certain time during the year. Sometimes, it’s accrued throughout the year. You might accrue paid vacation evenly throughout the year, or you might earn it slowly at the beginning of the year and more quickly toward the end. All of these types of policies are potentially valid.
Vacation policies that say “use it or lose it” by a certain date are allowed. It means that your accrued vacation might not transfer to the next year, for example. A “use it or lose it policy” must be reasonable, meaning your employer can’t say that you lose unused vacation if they don’t give you a reasonable opportunity to use it. So, a use it or lose it policy applied to termination is illegal, but it’s ok if there is a general date or deadline for using your accrued time.
The details of a vacation policy should be clear in your employment contract. Although you can attempt to prove a vacation policy by showing how your employer has handled vacation pay and accrual in the past, having a written policy to rely on is your best bet. If you can show that your employer violated their policy, you’re in a good position to get your full pay. The clearest case is a written policy that says you are entitled to be compensated for unused vacation time that you have earned when your employment is terminated. You will need a copy of that policy.
These same policies usually apply to paid time off, which some employers offer instead of “vacation” pay. However, these rules generally don’t apply to sick time. If your employer’s policy says you do get paid for unused sick time, then that’s another story. It all comes down to what they have promised you.
If you have questions about whether your employer owes you for your unused vacation time, feel free to contact us. We will do our best to answer your questions, and if you need, we will recommend an experienced employment attorney to help you take the next step.