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Friday, September 19, 2008
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Please check the NC Wage Payment Law governing this. Unless otherwise specified and communicated in writing all unused vacation pay must be paid out upon termination on or before the next regularly scheduled payday.

Terry Guthrie, SPHR

Vice President, Human Resources

Festiva Resorts

Asheville, NC

Keisha-Ann replies:

As a primary point, employers are not required to provide vacation pay plans for their employees.  N.C. Gen. Stat. § 95-25.12.  Therefore, your statement regarding North Carolina Wage and Hour Law will be correct if: (1) the employer has a policy or practice that provides for paid vacation; and (2) the employer's policy or practice requires that all unused vacation pay be paid out upon termination.  However, if the employer does not have a policy or practice in effect that requires (1) and (2) above, then the employer is not required by statute to pay its employees unused vacation pay upon their termination.  

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Also, as stated in my article, written notice regarding vacation pay is only required in the event that the employer changes an established vacation plan [that already provides for vacation pay] and only "if said change will result in the forfeiture of vacation or pay."  N.C. Gen. Stat. § 95-25.12.  Employees that are not notified are not subject to forfeiture of their vacation time or pay.  Id.  Thus, if the employer does not have a policy in place requiring the payment of unused vacation pay, the statute does not require that the employer to give notice or pay unused vacation pay out upon an employee's termination.

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