Although no Arizona law requires private sector employers to provide employees with vacations, paid or unpaid, most employers do offer their employees some version of vacation. Employers need to keep firmly in mind that if they “promise” vacation, they may be legally bound to provide it—and that a binding promise does not require embodiment in a formal employment contract. Arizona courts have ruled that, under some circumstances, an employer's policy or practice, whether made in an employee handbook, or given orally, or simply understood as a matter of consistent practice, may constitute an implied contract, which is binding and enforceable.
Under Arizona law, employers are required to pay all wages due to employees who leave the job. Arizona statute defines the term “wages” as nondiscretionary compensation due an employee in return for work performed for which the employee reasonably expects to be paid, whether because it is a written policy, an unwritten policy, or the consistent practice of the employer to pay for earned, accrued time. Wages include sick pay, vacation pay, severance pay, commissions, bonuses, and other amounts promised when the employer has a policy or a practice of making such payments.
Employers that have a policy or practice of paying employees for vacation or sick days upon separation must treat the pays as wages and comply with the timely payment requirements of state law (AZ Rev. Stat. Sec. 23-353).
Employees who believe their “reasonable expectations” for vacation pay at termination have not been fulfilled may file a wage payment claim with the Industrial Commission—or the employee may ...