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.
Oklahoma law requires an employer to pay an employee's wages in full at termination, and defines “wages” to include vacation pay and other similar advantages agreed on between the employer and the employee or provided by the employer to his employees in an established policy.
If an employee grants paid vacation and provides or promises to provide payment of cash in lieu of time off for unused but earned time, an employee who leaves the payroll must be paid for such time (OK Stat. Tit. 40 Sec. 165.3; Biggs v. Surrey, 811 P.2d 11 (1991)).
For additional information on final wage payments, please see the Paychecks