If promised, vacation must be granted. Although no Missouri 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. Missouri 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.
When vacation pay is due at termination. The courts have held that “the right to vacation pay upon termination of the employer-employee relationship is a contractual right. It may be the subject of the provisions of a written contract. Or it may be established by implied contract. Customs and usages may by implication become part of the parties' contract” (Webster Groves v. Institutional & Pub. Em. U., 524 S.W.2d 162 (1975); Hoffmeyer v. Davco Food, Inc., 803 S.W.2d 49 (1991)).
Accrual method. Employers are free to devise their own system for vacation accrual . There are several different commonly used options:
• On a monthly basis
• On a pay-period basis
• 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 vacation days, it should state clearly that employees will not be entitled to pro rata payment if they leave part way through the period. Remember that any ...