Recent studies show employees throughout the United States are leaving their jobs in an increasingly high volume. Regardless of the reason for doing so, separating from an employer can present many questions and concerns. A common question we hear at Keches Law Group: what happens to my vacation pay after quitting my job in Massachusetts?
American Workers Are Leaving Their Jobs
There’s no doubt about it; Americans are quitting their jobs. In fact, according to the Bureau of Labor Statistics, 4 million people quit their job in April 2021 alone.
Experts believe a year of isolation due to the COVID-19 pandemic served as a “wake-up call.” For the first time in their life, countless workers had the opportunity to sit down and contemplate their job satisfaction. Many realized they were unhappy and decided to make a change.
Although 2021 may be exceptional, it is not uncommon for Americans to change jobs frequently. According to the Bureau of Labor Statistics, the average American will hold about 12 positions throughout their lifetime. This number is likely to keep growing as younger generations continue to abandon the norm of staying with one company until retirement. In particular, Millennials and members of Gen Z are often pegged as “job-hoppers” by their older peers.
The increasing rate of employees leaving their jobs by choice begs the question: why?
Why Employees Quit
Workers are typically motivated to leave by five common workplace issues.
- Looking for a less difficult boss – One of the most common reasons people leave their jobs is because of a “bad boss.” Workplace leaders, especially an employee’s direct supervisors, play a crucial part in workplace satisfaction. When a boss’s management style or communication skills are lackluster, this can increase workers’ desire to leave a company.
- Seeking higher pay or better benefits – When surveyed, employees who quit their jobs often point to their paycheck. Employees who feel underpaid and believe they can receive higher compensation or a more appealing benefits package for similar work elsewhere may be motivated to seek new job opportunities.
- Pursuing greater career advancement – Frequently, workers leave roles when they feel they have maxed out career growth opportunities. Lack of promotions or leadership positions might cause an employee to quit.
- Searching for a better work schedule – The dramatic switch to remote work during the peak of the COVID-19 pandemic caused many employees to realize they need more flexible work schedules. Although not alone, women were strongly affected by this change. When childcare facilities closed their doors to prevent the spread of COVID-19, many women took on more responsibilities at home. With childcare costs increasing by 41% post-pandemic, many women need flexible hours and working arrangements.
- Changing career focus – The pandemic’s cruel reign taught us many things. Most importantly, the fragility of human life. Many Americans realized life is too short to stay in an unsatisfying job. This epiphany, combined with over a year spent at home working remotely, laid off, or out of work, pushed many employees to make drastic career changes, by switching industries or starting their own business.
Leaving a job, especially one held for a long time can pose questions regarding unused vacation pay.
The Massachusetts Wage Act and Vacation Pay Requirements
Massachusetts does not require employers to offer vacation time to their employees. However, employers who do provide vacation benefits must follow specific laws.
Withholding Vacation Payments is Illegal
Under Massachusetts law, employers who choose to offer their employees paid vacation must treat such payments as wages.
Just as it is illegal to withhold wages, it is unlawful to withhold vacation time.
Like regular wages, employers provide vacation time to employees in exchange for their service to the employer. Therefore, when an employee leaves a job, their employer must compensate them for any accrued remaining vacation time earned.
When an employee quits, their employer must pay them all their earned wages by their next regularly scheduled payday. Employers must pay the employee all of their accrued vacation time by this date as well.
However, if an employee is fired or terminated, they must be paid all earned wages and accrued vacation that same day.
If an employer fails to follow either of the two rules outlined above and their employee obtains a judgment in their favor, the court will award the employee treble damages and attorney’s fees pursuant to the Wage Act.
Translation: if your employer fails to pay you earned wages or accrued vacation time upon separation from the company, you may be eligible to receive three times your lost wages.
Employers May Establish Vacation Time Policies
In Massachusetts, it is legal for employers to establish vacation time policies, with few exceptions.
For instance, employers may:
- Establish when employees can begin to earn vacation time – It is lawful for employers to enact policies requiring a probationary period (for example, six months) before an employee may begin to accrue vacation time.
- Specify amount of paid vacation employees will receive – Employers may decide how much vacation time they will offer to their employees.
- Determine time of year employees can take vacation – An employer’s choice to limit vacations to a specific time of year dependending on business needs is legal in the state of Massachusetts.
- Create procedures for scheduling vacations – It is legal for employers to establish rules for scheduling vacations. Restrictions may include whether an employee must notify the employer of their desire to take vacation time.
- Cap the amount of vacation time an employee can accrue or earn – For example, employers are allowed to develop policies such that after accruing a certain number of weeks of vacation, an employee may not accrue additional vacation time until they use some of their preexisting vacation time.
- Construct “use-it-or-lose-it” policies – It is lawful for employers to create policies in which employees must use their accrued vacation time by a specific date or lose it, so long as they have adequate notice of such a policy.
- Amend terms of vacation policies – Employers can amend their vacation policies at any time. But, amendments must be prospective. Meaning in effect from the date of enactment forward.
Quit? Fired? We Can Help.
If you’ve recently quit your job or have been fired and have questions about your wages or vacation pay benefits, we can help. Contact us today.