No Virginia law requires private sector employers to provide employees with vacations, paid or unpaid, but most employers do offer some version of vacation, in Virginia and nationally. Employers should note that if they “promise” to provide an employee with paid vacation, and the employee works in reliance on this promise, the employee may be entitled to the paid vacation. The employer's “promise” may be as binding as a formal employment contract.
When an employee leaves the job, the question of payment for vacation time will depend on what the employer has promised. Virginia courts have ruled that vacation which is part of a contract must be compensated at termination. On the other hand, Virginia courts are conservative in their interpretation of what constitutes an implied contract. Still, if vacation is consistently provided or promised, there is certainly a possibility that an employee who leaves the payroll may be owed pay for accrued but unused time.
Employers in Virginia are free to devise their own system for vacation accrual. There are several common options:
• On a pay-period basis, or
• Upon completion of a 6-month or 12-month period
It is important for employers to be clear and unambiguous when drafting their vacation 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.