Is My Employer Required to Pay Me for Vacation or Sick Days When I End My Employment?
Generally speaking, there is no law that requires a private employer to compensate an employee for accrued vacation days when their employment ends. In fact, there is no law that requires an employer to even provide that leave time, either paid or unpaid. Nonetheless, most employers offer paid leave days to some extent.
A Promise is a Promise
Once an employer decides to offer paid leave days, they may be legally bound to provide those days. Alabama courts have ruled that, in certain situations, an employer's assurance of paid vacation time may constitute an implied contract that is enforceable. This is true regardless of whether the promise is made in an employee handbook, or made verbally to the employee.
When Vacation Pay Is Due at Termination
In the case of Amoco Fabrics v. Hilson et al., 669 So. 2d 832 (Ala. 1995), the Alabama Supreme Court held that offered vacation time is considered a form of compensation for services. Once the services are rendered, the right to the promised compensation is vested just as are wages or other forms of compensation. The reasoning is that, once it is communicated to employees, an employer cannot unilaterally "revoke [its] vacation pay policy once the employees have performed." If an employer in Alabama does not want to pay their employees for accrued but unused vacation time, they must say so specifically, in advance.
Company Policies Are in Control
The other side of this coin is that, an employer may lawfully establish a policy that disqualifies an employee from payment of accrued vacation upon separation from employment, if they fail to comply with specific requirements, such as giving two weeks' notice, as was the case in ISS International Service Systems v. Alabama Motor Express, 686 So.2d 1184 (Ala. App. 1996).
Sick Leave is a Different Issue
Like vacation days, an employer is not required to provide paid sick leave. However, if it chooses to do so, then it must abide by its policy. The difference with sick leave is that, under the Family and Medical Leave Act ("FMLA"), an employer may be required to provide an employee with unpaid sick leave. Circumstances that factor into whether the employer must provide leave under the FMLA is the company's size and the duration of employment.
The FMLA is a federal law that requires covered employers to provide employees with job-protected, unpaid leave for qualified medical and family reasons. Qualified medical and family reasons can include personal and family illness, pregnancy and adoption. Your employer can request certification from your healthcare provider(s) regarding your medical condition, once you request medical leave. If you do not provide the requested certification, your employer has the right to deny your leave or continued leave. Employers are not required to obtain medical certifications, but if they request one, you are required to comply. Unlike sick leave, you cannot expect to receive any payment for FMLA leave upon termination of your employment, because employers are not required to provide paid leave, nor does the leave accrue.
If you feel you have any questions regarding your employment rights, please contact Wrady & Michel, LLC, either
online or by calling us at (205) 265-1880.