If promised, must be granted. Although no Texas 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 might be legally bound to provide it—and that a binding promise does not require embodiment in a formal employment contract. Texas 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? Texas pay law defines “wages” as compensation owed by an employer for labor or services given by an employee, and vacation pay, holiday pay, sick leave pay, parental leave pay, or severance pay owed to an employee under a written agreement with the employer or under a written policy of the employer. When an employee leaves the job, the question of payment for vacation time depends upon what the employer has promised.
Therefore, if vacation is provided or promised, an employee who leaves the payroll must be paid for accrued but unused time (TX Lab. Code Sec. 61.001(7)(B)). The law will enforce such fringe benefit payments according to the terms of the written policy or agreement, so if there are conditions on vacation or vacation pay, those conditions will be enforced.
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 ...