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Employment Law/vacation pay upon quitting


We have an employee that has been with us for 16 months and gave his two week notice for quitting.  We give one week of vacation after one year of employment, so he should just be eligible for that.  (He started 11/30/11)  He used 40 hours of vacation in 2012 in anticipation of his one year anniversary and used 8 hours so far in 2013.  The owner feels that his final paycheck should have those 8 hours of vacation deducted from his check because he has already used his 40 hours of vacation and because he is not staying through his second year he is not eligible to use any more vacation days.  Do you have any suggestions on how to handle this situation?


Does your company have a written vacation policy that specifies how and when vacation is earned?  If so, under Wisconsin law you are free to follow that policy, so if it states that vacation only is earned at the end of each year of employment, this employee clearly would not be eligible for the 8 hours he already has taken, and thus you should be able to recover it.

If the practice you described is not provided to employees in writing, but is just your standard practice, I believe you are still OK to withhold the 8 hours of pay from the final check, as long as it is consistent with how you may have treated other employees in similar circumstances.  Wisconsin law defines vacation pay as wages, and requires that any accrued but unused vacation pay must be paid out at termination of employment.  However, that obviously doesn't apply where the employee has already used time which, under your policy or practice,  has not really "accrued" yet.  The state law governing deductions from wages does not seem to cover this situation, as it requires the employee's written consent for a wage deduction only if the deduction is for defective or faulty workmanship, lost or stolen property or damage to property.

(Wisconsin Stat. 103.455; WI Dept. of Workforce Dev. FAQ)

I hope you find this helpful.

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Frank C. Magill


I can answer questions about any U.S. labor or employment law question. I cannot answer questions about non-US law. I am not a specialist in employee benefit law (ERISA and HIPAA) or Workers' Compensation law, but will do my best to point questioners toward good resources availabe online. Expertise includes, without limitation, EEO/Affirmative Action/Employment discrimination (Title VII, Age Discrimination in Employment Act, Americans With Disabilities Act, GINA, Fair Credit Reporting Act as applied to employment); Fair Labor Standards Act; Texas labor code; Family Medical Leave Act; employee compensation; discipline and dismissal; force reductions, severance pay programs and administration; collective bargaining, union representation, grievances and arbitration, National Labor Relations Act and National Labor Relations Board; employee handbooks; staffing; dispute resolution outside of traditional labor agreements; employee communications; employment policies and compliance programs; codes of ethics; employment or labor litigation.


30+ years experience as corporate counsel for a Fortune 100 telecom company, specializing in labor and employment law issues. In addition to providing day-to-day advice to my company's internal HR leadership and staff, I've represented the company in numerous labor arbitration cases and at the bargaining table.

Texas, Illinois and Missouri state bars

J.D. 1979, Harvard Law School. B.A., Summa Cum Laude, 1976, Illinois Wesleyan University.

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