An employee retired, and his employer refused to pay him the accrued vacation time that he had accumulated prior to his retirement. The employer had adopted an unwritten “use it or lose it” vacation policy, and refused to pay any accrued vacation time to employees following their retirement, resignation, or dismissal. The court concluded, “In the absence of a clear, written policy establishing that vacation time granted by an employer to an employee is nothing more than a mere gratuity and not to be considered an amount due or a wage, accrued but unused vacation time is a vested right for which an employee must be compensated upon discharge or resignation.” The court acknowledged that employers can require employees to use their vacation time during the same calendar year, and prohibit the accrual of vacation time from year to year. However, vacation time accrued during the same calendar year ordinarily is a vested right that must be compensated. Church treasurers should recognize that their church may be legally obligated to pay accrued vacation time to employees following their retirement, resignation, or dismissal. Wyatt v. Avoyelles Parish School Board, (La. App. 2001).

This article first appeared in Church Treasurer Alert, June 2003.