(732) 988-5362|bburns@praxislegalsolutions.com
Praxis Legal Solutions - Lawyer & Legal Services in NJ

Praxis Legal Solutions

Client focused. Solution oriented.

  • Home
  • About
  • Areas of Practice
    • Contract Law
    • Corporate Law
    • Employment Law
    • Litigation Management
    • Mergers and Acquisitions
  • Contact Praxis
  • Payment Form

Business
Law

Business
Transactions

Contracts

Employment
Law

Legal
Services

Copyrights and
Trademarks

Summer Time / Vacation Time

September 7, 2012 by Barbara Burns Leave a Comment

Paid vacation is a powerful tool for recruiting and retaining employees. The opportunity to rest and recharge can improve employee morale and boost productivity. But paid vacation costs real money; and, to get the most for that money, employers should understand the law governing paid vacation.

In most states, including New Jersey, New York and Pennsylvania, accrued vacation is treated as earned income, and, when an employee leaves a job voluntarily or otherwise, the employer must include payment for accrued, but unused vacation in the final paycheck. In addition, because accrued, but unused vacation is treated as earned income, an employer may not condition its payment on an employee’s agreement to post-employment conditions such as non-competes or releases from liability.

For even a small business, accrued but unused vacation can result in a significant balance sheet liability. To avoid that consequence, employers should put in place a “use it or lose it” policy. Paid vacation is not a retirement benefit. Its purpose is to enable employees to take time off to recharge and to return to work with renewed energy and enthusiasm. To ensure that employees use vacation for the purpose for which it is intended, employers should require that employees use their vacation days in the period in which they are accrued. That can be a calendar year, an employment year, or a rolling 12-month period. Unused days are zeroed out at the end of the accrual period, thereby limiting the size of a potential balance sheet liability.

To maximize the incentive inherent in a paid vacation benefit, vacation accruals should be structured so that they cannot be used until an employee has been employed for a minimum period; for example, six months. In addition, vacation days should accrue gradually over the accrual period. For example, if an new employee is entitled to one week of paid vacation, he or she would accrue .41 day of paid vacation each month, beginning as of the first day of employment, but not be able to use the accrued days until he or she completes six months of employment.

Contact Praxis for more information about how to implement an effective vacation policy.

Related Posts

  • In California, Misclassifying Employees Just Got Harder.In California, Misclassifying Employees Just Got Harder.
  • Limited Liability Companies New and Improved
  • An Update on the SlantsAn Update on the Slants
  • Crowdfunding: The BasicsCrowdfunding: The Basics
  • Tax ThumbProperty Tax Appeals
  • Why Now?Why Now?

Filed Under: Business Law

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

You May Also Like..

  • Consumer Arbitration - Ocean County, NJConsumer Arbitration
  • Crowdfunding: The Basics
  • Bulk Sales Laws A Banana Featured - NJBulk Sales Laws A Banana Peel for the Unwary
  • Over-billing. Client, Beware.
  • licensing, njDifference Between Licensing and Franchising

News Update

Recent Posts

  • Contract Law – Understanding the Basics
  • New Jersey Bans Salary History
  • Earned Sick Leave Is Mandatory In New Jersey
  • Websites, Mobile Apps and the ADA

Categories

  • Business Law
  • Contracts
  • Copyrights
  • Copyrights and Trademarks
  • Employment Law
  • Fair Use
  • Legal Services
  • News
  • Taxes
  • Technology
  • Trademarks
  • Valuations

Areas of Practice

  • Contract Law
  • Corporate Law
  • Employment Law
  • Litigation Management
  • Mergers and Acquisitions

Quick Links

  • FAQs
  • Payment Form
  • Contact Praxis

Company Information

Praxis Legal Solutions LLC

4 Ocean Ave
Ocean Grove, NJ 07756
United States

(732) 988-5362
bburns@praxislegalsolutions.com
Hours:
Mo, Tu, We, Th, Fr: 8:00 am - 5:00 pm

Praxis Legal Solutions - Lawyer & Legal Services in NJraxis Legal Solutions © 2024. All Rights Reserved. | Legal Notice • Sitemap • Privacy Policy

  • Home
  • About
  • Areas of Practice
    • Contract Law
    • Corporate Law
    • Employment Law
    • Litigation Management
    • Mergers and Acquisitions
    • Back
  • Contact Praxis
  • Payment Form