Payment Of Unused Vacation Time Upon Termination

I mentioned in an earlier post that unused vacation may be among the “wages” that an employer must pay you after you’re fired.  I stress the word “may” because you’re not always entitled to a vacation payout.  Iowa Code 91A.4 requires employers to pay for unused vacation “[i]f vacations are due an employee under an agreement with the employer or a policy of the employer establishing pro rata vacation accrued. . . .”  That law basically requires you to consult your employee handbook and other applicable employer policies.

Many employers only reimburse terminated employees for unused vacation time under certain circumstances.  If your employer has such a policy, and you don’t meet whatever requirements your employer has imposed for a vacation payout, you won’t be entitled to that vacation.  But if you do meet the requirements then your employer must pay out that vacation, along with the rest of your wages, as part of your final paycheck that must be issued no later than the next regular payday after the date that your employment was terminated.

Erbe Law Firm can assist with any employment law or labor law questions that you might have.  Please feel free to contact Erbe Law Firm for a free initial consultation with an employment law or labor law attorney.


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