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Delaware Vacation and Final Wages

Posted by Tamara

Vacation time and final wages upon termination can be a confusing topic for Delaware employers and their employees.

The confusion arises from lack of understanding of their legal rights. Many employees feel they are entitled to be paid for any unused vacation time when they leave a company.

The truth is there is no Delaware state law that requires companies to pay workers for their unused vacation leave. There isn’t a federal law, either. So, in Delaware, employers are allowed to establish any type of unused vacation leave policy they wish.

Several states do not have mandatory payment of unused vacation time laws. Employees in Delaware and these other states are not entitled to be paid for unused time off, unless the employer has established a written policy specifically stating it will pay for this leave at termination.

Employers that establish written policies regarding payment of unused leave must follow that policy. Most courts will enforce and uphold a company’s written policy.

Though Delaware has not established a state law requiring payment for unused vacation leave, many states have, including Illinois, North Carolina, Louisiana, Massachusetts and Rhode Island. These laws vary from state to state, from paying for leave without exception, to stipulating specific conditions for payment.

For example, California pays its employees for their unused leave at termination, without exception, including situations where PTO (Paid Time Off) has replaced vacation leave.

Other states presume employers will pay workers for unused leave unless they have a written policy with specific details for scenarios where payment will not be made. Indiana, Wyoming and Oklahoma follow such guidelines. It is possible for an employer to pay for unused vacation without exception–like California–or to be very specific about what will be paid when.

For example, an employer can establish a policy to pay workers their unused vacation time only if they give two weeks’ notice before leaving the company. Businesses can also establish rules that prevent workers who were terminated for misconduct from receiving payment for unused time off. The important point is the policy has to be spelled out in writing.


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