If promised, must be granted. Although no Vermont law requires private sector employers to provide employees with vacations, paid or unpaid, most employers do offer their employees some version of vacation. However, 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 always require embodiment in a formal employment contract. Vermont courts have ruled that under some circumstances, an employer's assurance made in an employee handbook may constitute an implied contract that is binding and enforceable.
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.
Vacation pay at termination. The Vermont Supreme Court has ruled that “the matter of vacation or pay in lieu thereof is specifically controlled by the contract language.” In other words, if the contract (whether express or implied) entitles employees to no more than the salary as stated and doesn't promise vacation pay at termination for unused, earned vacation, it is not owed (Grady v. Union School District No. 32, 367 A.2d 690 Vt. 1976; 134 VT. 567 (1976)).