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Missouri Vacation and Final Wages Law

Posted by Tamara

Many Missouri employers have asked if they are required by state law to pay employees for unused vacation leave when they leave the company.

The answer is not by state law. There is no Missouri state law or federal law that mandates this policy. Absence of state or federal law, however, is not the only factor.

For example, if a Missouri employer establishes a company policy, in writing, that it will pay for unused vacation time then it must do so. Most courts enforce a company’s written policy.

There are several states, including Massachusetts, California, Louisiana, Oregon, Colorado and Illinois, which have established state laws that require employers to pay workers for unused leave at termination. These laws can vary widely from state to state.

In California, employees are entitled to payment for unused vacation leave at termination–without exception. In addition, if the employer has substituted PTO (Paid Time Off) for vacation leave, the employee is entitled to payment for unused PTO.

Wyoming, Indian and Oklahoma take a different approach. In these states, it is assumed that employers will pay for unused vacation time at termination–unless they have a written policy stating otherwise.

Nancy worked for a Wyoming company and recently left for a better job elsewhere. She did not receive payment for unused leave, however, because she did not give two weeks’ notice. Her employer’s written policy specifically states that unused vacation time will not be paid for if the worker is terminated for misconduct or fails to give two weeks’ notice.

Matthew worked for the same company, and did not receive payment for his unused leave, either. In his case, however, he did not voluntarily leave the job, but was terminated for misconduct.

Andrea also worked for this Wyoming employer and left the company. She, however, received full payment for her unused vacation leave, because she wasn’t terminated for misconduct, and because she provided two weeks’ notice before leaving..

The bottom line is that in most states without a specific vacation pay law, employees are not entitled to payment for unused vacation time, unless the company has established a written policy guaranteeing it.

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