If promised, must be granted. Although no Iowa law requires private sector employers to provide employees with vacations, paid or unpaid, most employers do offer their employees some version of vacation. Thus, it is important for employers to remember 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. Iowa courts have ruled that under some circumstances, an employer's assurance of paid vacation time, whether made in an employee handbook, given orally, or simply understood as a matter of consistent practice, may constitute an implied contract, which is binding and enforceable.
Employee notification. Employers must notify employees, upon written request, about “conditions of employment” policies, including vacation, sick leave, severance, etc. The information must be provided by written notice or posting.
Accrual methods. Employers are free to devise their own system for vacation accrual--for example, on a monthly or pay-period basis, or upon completion of a 6-month or 12-month period.
Vacation pay due at termination? Iowa's statutory definition of wages includes vacation pay; thus, an employee who leaves the payroll must be paid for accrued but unused vacation—but only if such pay is due under an agreement, a policy, or by practice of the employer. The Iowa Wage Payment Collection Law mandates that if paid vacation is provided or promised on a pro rata basis, payment to a terminating employee must be in proportion to the fraction of the year the employee has worked (IA Code Sec. 91A.4).
An employee who leaves and is not paid appropriately may bring a civil action. If the employee ...