In most states, private sector employers are not required to provide vacation, whether paid or unpaid, to employees. Therefore, employers have significant discretion in developing vacation and personal leave policies that best fit the needs of their workplace and employees.
If promised, vacation must be granted. Nonetheless, it is important for employers to understand that, if their practices, policies, or statements rise to the level of creating a “promise” of vacation, then the employer may create a binding legal obligation to provide vacation—even when state law would not otherwise require it to do so.
Payout of vacation at termination. This caution also applies to obligations to pay out accrued, but unused, vacation time at termination of employment.
Even where state law does not specifically require employers to pay out accrued vacation upon termination, a consistent practice, written policy, or contract promising such payment may create an enforceable legal obligation to do so.
In such circumstances, earned vacation will generally be treated as wages pursuant to state wage payment and collection laws.
In Kansas, “wages” means compensation for labor or services rendered by an employee, whether the amount is determined on a time, task, piece, commission, or other basis less authorized withholding and deductions.
While the Kansas Supreme Court has said that there is no inherent right to vacation payment for unused vacation time, if accrual or accumulation of vacation pay is promised to be paid for, that pay is considered wages and is owed when the employee leaves.
If the agreement also involves a “condition precedent” to receiving vacation pay (e.g., a certain period of notice to be given when leaving), ...