Compensation For Unused Vacation Time

One of the key issues surrounding termination of employment due to layoffs, company closures, restructuring, or for the conduct of an employee is whether or not the terminated worker will be paid for accrued vacation time.

Are New Jersey Employers Required to Compensate for Paid Time Off?

New Jersey is one of 37 U.S. states that do not legally require an employer to pay a terminated employee for their unused vacation time. This means that when an employee quits, is laid off, or fired, employers do not have to pay out accrued vacation time. However, compensation for unused pay or benefits is required if it is part of an employment contract or employer policy.

What is Your Employer's Policy on Unused Vacation Time?

Employers in New Jersey are free to establish their own policies for vacation time, sick days, and compensation for unused vacation and sick days earned. Company policies are the key in determining your rights to claim this compensation when you are terminated. Policies need to be specifically outlined as to what pay and benefits a terminated employee is entitled to when separation occurs.

New Jersey employment laws specifically require employers to pay terminated workers for unused vacation time if their company policies or an employee contract state their right to this compensation.

For instance, an employee that is terminated due to company closure, layoff, or restructuring, may be entitled to compensation; but an employee that is fired for conduct or unethical business practices may be exempt from this benefit.

An employer cannot discriminate against a terminated employee when specific policies are in place. This means that the employer cannot provide compensation to one terminated employee for unused vacation time and refuse those benefits to another employee terminated for similar reasons. Company policies will dictate the terms and conditions of compensation for all employees.

Am I Entitled to Compensation for Damages Under the WARN Act?

The federal Worker Adjustment and Retraining Notification (WARN) Act requires employers to give advance notice to employees facing termination due to mass layoffs, relocations, or closures. New Jersey has a similar law that requires employers to provide advance notice to employees facing termination, or provide severance pay when this is not possible.

These laws provide employees the time to acquire skills and training necessary to seek other employment once they are terminated from their present job. New Jersey employers with 100 or more employees that have been in operation for at least three years are required to provide fair warning of termination when 50 or more employees, or at least one-third of their workforce, are affected by layoffs, closures, or relocations.

Failure to provide advance warning to affected employees can result in compensation for damages. The laws are difficult to navigate in these circumstances, so terminated employees that wish to challenge their employer for benefits are wise to seek the counsel of an experienced New Jersey employment lawyer. They can review the company’s policies in relation to state and federal laws, to determine whether the employee has the right to claim these damages.

Contact Us to Learn More About Your Employment Law Rights

If you have been terminated from your job and feel you are entitled to compensation for unused vacation time, call us at (856) 512-1461 or contact us online to schedule a free consultation today. Our offices are conveniently located in Marlton and Northfield, New Jersey, and proudly serve clients throughout Camden County, Burlington County, Atlantic County, and across South Jersey.

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