Many employees accrue a considerable amount of time-off – vacation days, paid leave, sick days – over the course of their employment. In many cases, employees are entitled to compensation for that accrued leave when their employment ends. Employers are required to notify their employees of the company policy regarding payment of accrued leave; if the policy is to pay out accrued leave at the end of employment, or if the employee has reason to believe that they are entitled to paid accrued leave, then the employee may be able to recover for unpaid accrued leave.
Under New York Labor Law § 195, employers must “notify . . . employees in writing or by publicly posting the employer’s policy on sick leave, vacation, personal leave, holidays and hours.” The employer must . Courts in New York have repeatedly held that an employee’s entitlement to receive payment for accrued, unused paid time off upon termination of employment is governed by the terms of the employer’s policy. Where an employer’s policy is to pay out for accrued leave, they are obligated to do so.
Vacation pay under Article 6 is expressly regulated by § 198-c. Courts have held that 198-c “does not provide its own substantive source of recovery. Accordingly, an employee such as the Plaintiff can only recover benefits under section 198 if he is entitled to benefits under one of the substantive provisions of Labor law article 6.” Sosnowy v. A. Perri Farms, Inc., 764 F.Supp.2d 457, (E.D.N.Y. 2011). Essentially, if an employee is suing an employer for other forms of wage theft, such as underpayment of wages, failure to pay overtime, illegal deductions, or illegal withholding, then they have access to claims for unpaid accrued leave.
Employees attempting to recover unpaid accrued leave typically rely on New York Labor Law § 198-c. § 198-c creates penalties for employers who illegally withhold payment for accrued leave. However, not all employees are covered by § 198-c. For instance, § 198-c does not apply to any person in a bona fide executive, administrative, or professional capacity whose earnings are in excess of nine hundred dollars a week.
Under New York City’s Earned Sick Time Act, employers are not required to pay out accrued leave at the end of employment.
Many employees are entitled to receive compensation for accrued leave time when they change jobs. If you are an employee and you believe your employer has violated your rights under New York Labor Law, please contact The Harman Firm, LLP.