Vacation Policy

- The Vacation Policy is used by an employer to establish and communicate the company's policy on the amount and use of vacation time for full-time employees.
- Like all employee policies, the Vacation Policy should be adequately communicated to all employees. One or more of the following methods may be appropriate:  employee manuals or handbooks, posting on company bulletin boards, electronic mail, and written handouts.  
- There is no requirement under federal or state law that an employer establish a vacation policy.  However, providing a clear written policy helps reduce employee concern about taking vacation and should, in most cases, improve the morale of employees who expect some minimum vacation time. 
- A vacation policy should be non discriminatory, both in the way that it is established and the way that it is administered.  Rules concerning eligibility, scheduling, carryover, forfeiture, and payment for unused time should be clearly communicated to all employees.  
- Calculating the amount of vacation pay is up to the employer.  It is a good idea to try different methods to see which one makes the most sense for your business. 
- Accrued vacation is usually paid to employees who leave the company for almost any reason.  Many employers impose a maximum on the amount that will be paid, usually ranging from five to 30 days.  
- Employers are required by state law to pay terminated employees accrued vacation pay in some states, such as California, Illinois and Massachusetts.  In most other states, accrued vacation pay is included in the definition of "wages" by law and employees must be paid for this time upon their termination.  Check with your attorney or state office of labor relations (or other appropriate office) to determine your obligations under state law.

When You Need It
- To publish an employer's written policy regarding the availability and use of vacation time for employees.

Getting Started

You will need:
- Name of the company who is enacting the policy.
- Details of the amount of vacation time to be provided and the conditions for use of vacation pay.
- Review each item in the document and revise as may be necessary to fit the particular needs of your company and/or employees.

When to Review and Revise
- To correct the information contained in the policy.
- To amend the terms to respond to changing business climates, new laws, etc.