Table of Contents

    FAQs

    ​​Can a company have a policy that vacation must be used by a certain date or it is lost?

    Yes, provided it is not used a subterfuge to avoid paying an employee earned vacation.

    If an employer has a vacation policy, which allows employees to take reasonable amount of vacation during the course of the calendar year subject to business needs and the employee's own judgment and the policy does not a provide for the employee receiving a defined number of days after a defined period of employment, is the employer obligated to pay an employee who separates from employment a monetary equivalent equal to the amount of vacation pay to which the employee would otherwise have been allowed to take during that year but had not taken.

    Yes, but the employer would not be obligated to pay any monetary equivalent for earned vacation for a future calendar year.

    When I separate from employment, does my employer have a legal obligation to pay me vacation?

    If an employment policy states that an employer does not have to pay at the time of separation all unused vacation, the employment policy is not allowed to provide for a forfeiture of earned time upon separation.

    The employer is required to pay the monetary equivalent of all earned vacation to an employee who resigns or is terminated without having taken all vacation time earned in accordance with such individual employment contract or policy.

    Individual examples of the Act's application are set forth below,

    1. Example 1. The company has a policy that provides for five days of paid vacation after one year of service and all vacation not used shall be forfeited at time of termination. The employee completes one year of service as of July 1, and leaves employment on October 1, without having taken any vacation. Upon separation the employer must pay the employee the monetary equivalent of five days' vacation pay for the vacation earned as of July 1, and the pro rata vacation earned for the months of July through September. Since the employee worked three out of twelve months or 3/12 or 25% of the twelve month period after July 1 and the employer must pay the employee pro rata vacation for the period notwithstanding the terms of the written policy.
    2. Example 2. The company has a policy that provides that vacation is computed as January 1 of each year based upon service completed as of January 1. The company's vacation schedule states that employees who complete six months of service as of January 1st of each year shall receive one week and employees who have completed one year of service as of January 1 shall receive two weeks of vacation. Employee A has completed seven months of employment as of January 1, and separates from employment on the following July 1. Employee A has taken five days of paid vacation after January 1. Upon separation the employer must pay the employee the monetary equivalent of five days vacation pay even though the employee was not employed as of the following January 1, but notwithstanding the policy, Employee A is entitled to pro rata vacation for the period following January 1. Employee A has received all vacation earned as of the prior January 1, but the employee has earned vacation pay for the months of January through June (6 months) or 6/12 or 50% of the ten days the employee would have been entitled to receive on the following January 1.
    3. Example 3. The company has a policy that provides that vacation is computed as January 1 of each year based upon service completed as of January 1. The company's vacation schedule states that employees who complete six months of service as of January 1st of each year shall receive one week and employees who have completed one year of service as of January 1 shall receive two weeks of vacation. Employee A has completed one year of employment as of January 1 but has not taken any earned vacation after January 1. Employee A separates from employment on the following July 1. The employer would have to pay the employee 10 days for the vacation earned but not taken as of January 1 and the employee is entitled to pro rata vacation for the period following January 1. Employee A has earned vacation pay for the months of January through June (6 months) or 6/12 (50%) of the ten days the employee would have been entitled to receive on the following January 1.
    4. Example 4. The company has a policy that provides that vacation is computed as January 1 of each year based upon service completed as of January 1. The company's vacation schedule states that employees who complete six months of service as of January 1st of each year shall receive one week and employees who have completed one year of service as of January 1 shall receive two weeks of vacation. Employee A only had five months of employment as of January 1 and quits as of January 2. The employer is required to pay the employee the monetary equivalent of 5/12 of five days vacation pay for the five months earned prior to January 1.
    5. Example 5. The Company has a policy that provides that employees are credited for vacation as the Employee works with the policy providing that for each month of employment an employee earns one vacation day. If Employee A separates from employment after working three months and Employee A has taken three vacation days, the employer does not owe Employee A the monetary equivalent of any vacation pay upon separation. If Employee A has not taken any paid vacation, the employer would owe me the monetary equivalent of three vacation days.

    If I quit or am fired, am I entitled to payment for my unused accrued vacation time?​​​

    Yes. A former employee has a claim under the Act for the collection of the monetary equivalent of his/her vacation time earned in accordance with an employment contract, agreement or policy. 820 ILCS 115/5 and 56 Ill. Adm. Code 300.520.​

    If I quit or am fired, am I entitled to severance pay, sick pay or holiday pay upon separation?​

    An employee is not entitled to severance pay, sick pay or holiday upon separation, unless the employer has promised the pay in an employment contract or other agreement. 820 ILCS 115/2.​

    If I quit or am fired, am I entitled to the vacation pay that I had accrued?​

    If an employment policy states that an employer does not have to pay at the time of separation all unused vacation, the employment policy is not allowed to provide for a forfeiture of earned time upon separation and the employer is required to pay the monetary equivalent of all earned vacation to an employee who resigns or is terminated without having taken all vacation time earned in accordance with such individual employment contract or policy.​

    If you leave a company, they agree to pay you your two weeks of accrued vacation. Are you also entitled to the extension of insurance for those two weeks?

    The laws covered by the Illinois Department of labor do not cover insurance benefits. You may want to contact the U.S. Department of Labor, Employee Benefits Security Administration for an answer to your question.​