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Nanny Terminated: Do I have to pay out Vacation or Sick Time?


Most household employers provide paid time off – whether separate sick and vacation days, or a shared bank of days – as a recruitment and retention tool for their permanent staff. State, not federal law, determines:

  • When vacation time is considered to be earned wages (and cannot be forfeited)
  • If vacation time must be paid out upon termination
  • Whether an employer’s policy establishes the rules for vacation and PTO

As such, what state you’re in will determine how you can structure your vacation and PTO policies. In general state rules fall into 4 categories explained below:

  1. When the state rule says accrued vacation must be paid unless employer’s written policy expressly states otherwise, this means that your written work agreement governs. If the agreement is silent on a policy, it must be paid.
  2. When the rule says accrued vacation pay must be paid, this means unused at the time of separation. If you provide x days at the beginning of the year, even if it is only one month into the new year, that year’s vacation must be paid. If you accrue vacation time by the week – say for example 2.3 hours per week – the amount in the unused vacation pay bank must be paid.
  3. If the rule says no law, vacation pay out determined by employer’s written policy and your work agreement is silent, you may pay or not at your discretion. All employees must be treated the same.
  4. If the rule says unused vacation must be paid if employer policy is to pay, you are required to pay only if your written policy agrees to.

The chart below summarizes state vacation pay out regulations upon termination as they apply to nannies.*

June 2018

STATE PAYMENT ON TERMINATION
AL  no law, vacation pay out determined by employer’s written policy
AK employer must pay out unused vacation time
AZ accrued vacation must be paid unless employer’s written policy expressly states otherwise
AR accrued vacation must be paid unless employer’s written policy expressly states otherwise
CA accrued vacation must be paid
CO accrued vacation must be paid unless employer’s written policy expressly states otherwise
CT accrued vacation must be paid unless employer’s written policy expressly states otherwise
DE accrued vacation must be paid
DC accrued vacation must be paid unless employer’s written policy expressly states otherwise
FL   no law, vacation pay out determined by employer’s written policy
GA   no law, vacation pay out determined by employer’s written policy
HI accrued vacation must be paid unless employer’s written policy expressly states otherwise
ID accrued vacation must be paid
IL accrued vacation must be paid
IN  no law, vacation pay out determined by employer’s written policy
IA accrued vacation must be paid unless employer’s written policy expressly states otherwise
KS  no law, vacation pay out determined by employer’s written policy
KY  vacation pay out determined by employer’s written policy
LA accrued vacation must be paid unless employer’s written policy expressly states otherwise
ME accrued vacation must be paid
MD accrued vacation must be paid unless employer’s written policy expressly states otherwise
MA accrued vacation must be paid
MI accrued vacation must be paid unless employer’s written policy expressly states otherwise
MN accrued vacation must be paid unless employer’s written policy expressly states otherwise
MS   no law, vacation pay out determined by employer’s written policy
MO accrued vacation must be paid unless employer’s written policy expressly states otherwise
MT accrued vacation must be paid
NE accrued vacation must be paid
NV  no law, vacation pay out determined by employer’s written policy
NH unused vacation must be paid if employer policy is to pay
NJ unused vacation must be paid if employer policy is to pay
NM no law, vacation pay out determined by employer’s written policy
NY unused vacation must be paid if employer policy is to pay
NC unused vacation must be paid if employer policy is to pay
ND accrued vacation pay must be paid if employee worked for at least one year
OH unused vacation must be paid if employer policy is to pay
OK accrued vacation must be paid
OR unused vacation must be paid if employer policy is to pay
PA unused vacation must be paid if employer policy is to pay
RI accrued vacation pay must be paid if employee worked for at least one year
SC accrued vacation must be paid
SD no law, vacation pay out determined by employer’s written policy
TN unused vacation must be paid if employer policy is to pay
TX unused vacation must be paid if employer policy is to pay
UT unused vacation must be paid if employer policy is to pay
VT unused vacation must be paid if employer policy is to pay
VA no law, vacation pay out determined by employer’s written policy
WA no law, vacation pay out determined by employer’s written policy
WV unused vacation must be paid if employer policy is to pay
WI unused vacation must be paid if employer policy is to pay
WY no law, vacation pay out determined by employer’s written policy

 

* This list applies to household workers, who are legally non-exempt, hourly employees.

 

Other helpful information:

» Transitions: Firing the Nanny

» Blog: Attorney Bob King discusses return of family property.

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