In most states, including Florida, 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.
Florida law defines wages to include “all remuneration for employment, including commissions, bonuses, back pay awards, and the cash value of all remuneration paid in any medium other than cash.” The statute does not explicitly include vacation time in this definition; thus, employers may generally enforce “use it or lose it” policies and may provide for forfeit of unused vacation upon termination. (FL Stat. Sec. 443.036 (45); FL Stat. Sec. 443.1217).
However, the Florida Supreme Court has found that other forms of compensation provided for in an employee contract or similar agreement may also constitute “wages.” (Ferry v. XRG International, 492 So. 2d 1101(1986))
In this case, the employer had agreed to pay ...