If promised, must be granted. Although no Oregon 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. Oregon 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.
Vacation pay due at termination? Vacation pay is a matter of agreement between employers and employees. Employers don't have to offer it but are required to honor an established policy or agreement relating to the payment of accrued vacation upon termination.
Oregon courts have ruled that vacation that has been “contracted for” (promised in writing, orally, or consistently provided) is considered to be wages. If such time is not compensated, the employee may file a complaint with the Department of Labor and Industries that may result in financial penalties, attorney's fees, and court costs (OR Rev. Stat. Sec. 652.140; State ex rel. Roberts v. Public Fin. Co., 662 P.2d 330 (1983)).
Accrual method. 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. It is important to be clear and unambiguous when drafting such policies. If the policy is intended to ensure that employees work the entire accrual period to earn their ...