Do I Have to Offer Paid Vacation to Employees?

Understanding the Rules About Paid Vacation Time

There is no requirement that you offer paid vacation to your employees under federal or Massachusetts law. If you offer it as a benefit, you are allowed to structure it in just about any way you want: it can accrue all at once at the beginning of the year, or weekly or monthly. It can roll over into the next year or not.

If you do offer vacation time, you should understand that any time accrued but unused at the end of employment has to be paid to the employee. This is true regardless of the reason for termination, or whether it was voluntary or involuntary.

Some employers have an "unlimited vacation" policy. This means they do not track or accrue time, and employees are trusted to take the time they want and still get their work done. It may or may not mean that you do not have to pay out any time at termination. On the one hand, there is never anything "accrued." On the other hand, courts may see this as a way to escape wage and hour obligations, and assign some kind of value to unused vacation if an employee makes an issue of it.

Learn more here about paid time off under Massachusetts law.