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Employment Law/Rightful compensation after termination


This question pertains to resolving an argument over earned compensation after the termination of an employee in New York.
It has always been company policy that supplemental benefits (vacation, sick days, etc) are accrued based upon the anniversary date of the hire. I.e. if hired May 1st, then every May 1st a new period of accrual begins, and so forth.
However, an argument has arisen because a recently terminated employee maintains a belief that "according to law" any and all anniversary periods begin at the first of the year, not their date of hire. Furthermore, they also believe they are entitled to all vacation, sick days, etc. that accrue during that period. In other words, even though they were hired May 1st, 2014, they want to be compensated for all supplemental days that accrued between Jan. 1, 2014 through Jan. 1, 2015.
Upon termination, this employee was compensated for the unused supplemental days they did earn. However, phone calls from this ex-employee have escalated from inquiries to now threats of a lawsuit if we don't pay what they want. He also maintains wrongdoing on our part and that we are cheating him out of money.
As far as we understand the laws, we believe we are not on the hook to pay this ex-employee for "un-earned" days. In this convoluted mess, who is wrong?

New York Employment laws say that you must pay any fringe benefits (this would include those days mentioned abo ve) that were in the employee policy. This would be days earned only. They cannot sue you for days not earned.

Q: Must an employer pay workers for holidays, sick time and/or vacations?

A: Under the New York State Labor Law, payment for time not actually worked is not required unless the employer has established a policy to grant such pay. Holidays, sick time and/or vacations fall under 'time not worked.' When an employer does decide to create a benefit policy, that employer is free to impose any conditions they choose.

Fringe benefits may include:
 Reimbursement of expenses or tuition
 Health coverage
 Payment for      - Sick time       - Vacation       - Personal leave       - Holidays


Q: What is the status of an employer's oral agreement to provide a particular fringe benefit?

A: Section 195.5 of the Labor Law states: Every employer shall notify his employees in writing or by publicly posting the employer's policy on sick leave, vacation, personal leave, holidays and hours.

If an employer does not have a written policy, the oral policy (or past practice) may be enforced - if the terms of the policy can be confirmed through an investigation. Moreover, violators of 195.5 are subject to civil penalty.


Q: When employees resign -- or are discharged -- from a job, must the employer pay them for any accrued, unused vacation time?

A: Whether an employer must pay for unused time depends upon the terms of the vacation and/or resignation policy. New York courts have held that an agreement to give benefits or wage supplements, like vacation, can specify that employees lose accrued benefits under certain conditions. [See 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).] To be valid, the employer must have told employees, in writing, of the conditions that nullify the benefit.

An employee has earned vacation time
There is no written forfeit policy
The employer must pay the employee for the accrued vacation

This is from the New York Department of labor. Here is the website.  

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Shirley McAllister, CPP, PHR


I can answer questions about payroll laws and payroll tax laws and Human Resource laws and agencies. I can answer federal payroll and human resource law questions and most states; I do not have a knowledge of the local taxes for cities and counties within the state. If and when I can I will try and send you the website where you can reference the answer and where you can obtain more information as well as a contact number if needed for that particular agency. Some agencies I have worked with are IRS, Department of Labor (federal and state), Revenue Canada (and provincial governments), Inland Revenue, OSHA (0ccupational Safety and Health Administration); Social Security Administration and National Child Support as well as other agencies in Payroll and Human Resources. Some Laws I am particularly familiar with are FLSA (Fair Labor Standards Act), ADA (Americans With Disabilities Act), FMLA (Family Medical Leave Act) COBRA (Consolidated Omnibus Reconciliation Act ) , QDRO's, QMCSO's, and other support orders and garnishments, USERRA (Uniformed Services Employment and Remployment Rights Act,PPA Act (Pension Protection Act of 2006, As well as most other employment type acts. I am also well versed in the Title V Civil Rights Act and the HIPAA (Health Insurance Portability and Accountability Act).


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