Company Benefit Programs
Legal rules on employee vacation time do not force employers to offer paid vacation to employees, but many employers nonetheless offer the same as part of their employee benefit programs. The guiding purpose is to attract and retain talent, and ensure that the workers remain at their productive best. About 75 percent of the US workforce avail of paid vacations by such company initiated benefit schemes.
The vacation time given to employees depend on the type of company, the tenure of the employee, and the level of the employee. The common practice among large companies is to offer 15 days of paid vacation and 10 days of paid holidays for full-time employees with 10 years of tenure. The average however drops to 9 days of paid vacation with 6 days of paid holidays per employee when considering all companies and the entire workforce.
Most schemes require the employee to provide advance notice and coordinate with the employer to ensure adequate staffing before proceeding on vacation leave. Most companies, for instance do not allow employees to take vacations during the peak business season.
Employees allowed to cash unused vacation leave benefits, again depends on the terms of the agreement between the employer and the employee. Absence of a written forfeit policy, however, mandates the employer to pay the employee for the accrued vacation. Federal law also requires employers to compensate terminated employees for accrued vacation time not utilized before the termination. Keep in mind that if a labor law court decides on whether the terminated employee will receive accrued or earned vacation, they will first look to the Company's employee handbook for guidance.
The employer remains at liberty to change the nature of benefits. In the Glenville Gage Company, Inc. v. Industrial Board of Appeals of the State of New York, Department of Labor, 70 AD2d 283 (3d Dept 1979) affd, 52 NY2d 777 (1980), the court decreed that an agreement to furnish benefits such as vacation, can specify that employees forfeit accrued benefits under certain conditions. The employer needs to notify the employees in writing of the conditions that nullify the benefit.