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Termination: Are You Entitled to Payout of Vacation Time?

Rolled Up Bundle Of Fifty Dollar Banknotes On Red and White striped Deck ChairThe short answer is—it depends. There is no federal or state law in Florida requiring private employers to pay out an employee’s accrued vacation or other paid time off (PTO) at the time of termination.

Generally, you may be entitled to payout of your accrued, unused time in the following situations:

  1. Your employer promised or contractually agreed to pay out your vacation or PTO time upon your separation of employment.
  2. Your employer has a policy or past practice of paying out vacation or PTO benefits upon firing or separation of employment. As one example, if the policy says that any terminated employee regardless of reason will receive a payout of any accrued vacation or PTO, then you should be entitled to it. Because employers may have varying policies or practices on the payout of accrued vacation time, whether you are entitled to your accrued vacation pay is dependent upon the policy language or company practice.
  3. Your employer is required to pay out accrued vacation pursuant to a negotiated collective bargaining agreement.

In the absence of a contract, policy or promise to pay out your accrued vacation or PTO, you are NOT otherwise entitled to payout of these benefits if your employment ends.

Is Sick Leave the Same?

Does your employer also provide accrued sick leave as a benefit in addition to vacation or PTO? If so, the above scenarios apply to sick leave—private employers have no legal obligation to pay out unused sick leave to separated employees.

Things are a little different if you work for a public entity, such as the state or a county.  For example, Florida law says that certain public employees may be paid out one-fourth (or up to 25%) of their accrued sick leave ONLY, upon termination or retirement, on the condition the separating employee has not engaged in certain types of misconduct, like unlawful striking, theft or embezzlement.

What about Federal Workers?

When it comes to federal workers, the rules vary. Certain classes of employees working in federal service are entitled to receive a lump-sum payout of any of their unused annual leave, which is similar to vacation time or PTO, when they separate or retire from service.

It is interesting to note that employers that are federal contractors, however, are NOT required to pay out of any unused accrued, sick leave to employees upon termination under federal law.

If you have been fired or terminated and think your employer owes you accrued vacation pay, consult with an experienced employee rights’ attorney who can help you understand what you may be owed.

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