If promised, must be granted. Although no Rhode Island 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. In Rhode Island, an employer's policy or practice, whether made in an employee handbook or given orally or simply a matter of consistent practice, may constitute an implied contract, which is binding and enforceable.
Vacation due at termination. Rhode Island law explicitly states that when an employer terminates an employee and the employee has completed at least 1 year of service, any vacation pay accrued according to policy or any other agreement is considered wages and must be paid by the next regular payday. This remains true even if the employer liquidates, merges, moves out of state, or disposes of the business (RI Gen. Laws Sec. 28-14-4).
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 vacation days, it should state clearly that employees will not be entitled to pro rata payment if they leave partway through the period. Remember that any vagueness in the policy is likely to be construed against the employer.