In most states, including Montana, 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.
For this reason, employers must ensure that vacation accrual, caps, and payout terms are set forth clearly and unambiguously in a written policy available to all covered employees. If there is any ambiguity in the policy, it will likely be interpreted in favor of the employee.
Pay and termination.
Once vacation has been earned according to the employer’s policy, it is then considered wages and is due and payable in the same manner as regular wages (Attorney General Opinion 56, Volume 23
An employer cannot require an employee to comply with specific requirements in order to receive accrued vacation leave upon separation from employment, such as giving timely notice or not being terminated (Langager v. Crazy Creek Products, Inc., 287 Mont. 445; 954 P.2d 1169 (Mt. Sup. Ct. 1998)).
For additional information on final wage payments, please see the Paychecks
Use it or lose it policies. "Use it or lose it" policies are not permitted in Montana. However, caps or maximum accumulation amounts that effectively prevent additional vacation from accruing until existing time is ...