Can an Employer Make Employees Use Vacation Hours?

Q: Can an employer legally make their employees use their accumulated vacation hours?

A: Yes. An employer can tell an employee that they need to take time off. However, that rarely bodes well for the morale of the employee if they don’t want to take the time off.

Some employers have a “use-it-or-lose-it” policy where any remaining vacation time is lost if unused by a certain date. But these kinds of policies are not legal in all states*. If your state doesn’t allow use-it-or-lose-it, or the employee isn’t willing or able to take off as much time as you would like, you could instead pay them for the hours they’re unable to use. This option is acceptable in every state and reduces the potential for low morale.

* In New York, employers can implement a “use-it-or-lose-it” policy that requires employees to use their leave by a certain date or lose the leave, provided that employees are given prior notice of the policy.

If you’d prefer that employees use up the time, it’s best to give them at least three months’ notice (even more is better) so they can plan for what they’ll do with their free time and coordinate with friends and family.

Be sure that you’re applying these policies and practices consistently across the organization. And if you’re introducing a new standard like use-it-or-lose-it, or payout on December 31st, make sure that employees are made aware of the policy in writing.

For more information on how GTM helps clients manage HR responsibilities, contact us at (518) 373-4111.