Ask the Lawyer

Employment Law


Q: If someone is let go due to cutbacks is s/he entitled to unused vacation and or sick pay?

A: Generally, New York law does not require employers to provide paid vacation to employees. The law also does not require that employees be permitted to accrue vacation time. However, where employers have agreed to provide paid vacation time as a benefit of employment and have further agreed to allow employees to accrue vacation time, then, as explained below, a terminated employee may be entitled to receive accrued vacation pay upon termination.

The law in New York State governing the payment of wages and wage supplements, such as vacation pay, is set forth in a comprehensive statutory scheme contained in Article 6 of the Labor Law. Section 191(3) of the Labor Law requires that upon termination of employment, employers must pay employees their “wages not later than the regular pay day for the pay period during which the termination occurred….” The United States Supreme Court has examined New York’s statutory wage scheme and determined that vacation pay is not included in “wages” for the purposes of Section 191. Rather, whether an employer is obligated to pay for unused, accrued vacation time depends on whether the employer has adopted a policy or entered into an agreement with regard to accrued vacation pay. Where such an agreement or policy exists, Section 198-c(1) of the Labor Law requires the employer to abide by its terms. Section 198-c(1) provides as follows:

“[A]ny employer who is party to an agreement to pay or provide benefits or wage supplements to employees… and who fails, neglects or refuses to pay the amount or amounts necessary to provide such benefits or furnish such supplements within 30 days after such payments are required to be made, shall be guilty of a misdemeanor….”

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