Vacation and Severance Pay in New Jersey
Although New Jersey law doesn't require employers to pay out unused vacation time on termination, employers that have a policy of paying out vacation have to follow it.
When an employee quits, is laid off, or is fired, some states require employers to pay out all accrued, unused vacation time. New Jersey law doesn't impose this requirement in all situations. However, if the employer has a policy allowing employees to accrue or earn vacation time, then the employee may be entitled to payment.
In this situation, the employer's policy or practice of paying out vacation time becomes a contract with the employee and is considered a benefit of employment. The majority of companies have policies setting forth a schedule for accruing paid vacation days, and may also address the issue of paying out vacation upon termination. If you receive a severance package from the company, you may be entitled to payment for unused accrued vacation days in addition to any amount of severance you receive. You should request that your accrued vacation be added to the severance amount.
If you have been terminated, review your company's policies or handbook. If your company hasn't paid you for your unused vacation time in violation of its own policies or past practices, you may want to consult with an employment lawyer.
From the Author: New Jersey Labor and Termination Attorneys