Before the pandemic, I started a project called the “Employment Law Checklist”. The reasoning behind it was twofold — to talk about all the employment laws that employers in Connecticut had to face and to give me something to write about when employment law news was slow.
So, with summer in mind, it’s time to talk vacations. Notably, no Connecticut statute mandates employers provide vacation time to employees but employers are required to at least have a policy regarding vacation time. Therefore, employers should be mindful of Conn. Gen. Stat. Sec. 31-76k.
What Does the Law Say? It states:
If an employer policy or collective bargaining agreement provides for the payment of accrued fringe benefits upon termination, including but not limited to paid vacations, holidays, sick days and earned leave, and an employee is terminated without having received such accrued fringe benefits, such employee shall be compensated for such accrued fringe benefits exclusive of normal pension benefits in the form of wages in accordance with such agreement or policy but in no case less than the earned average rate for the accrual period pursuant to sections 31-71a to 31-71i, inclusive.
Let’s start with the obvious – it’s a weirdly constructed statute. It is basically conditional. IF an employer has a policy, and IF the policy says that an employer has to pay “accrued fringe benefits” upon termination and IF the employee hasn’t received such benefits, then the employee has to get paid for that time upon termination — by law.
Scope: Employer is defined very broadly in Conn. Gen. Stat. Sec. 31-71a and “includes any individual, partnership, association, joint stock company, trust, corporation, the administrator or executor of the estate of a deceased person, the conservator of the estate of an incompetent, or the receiver, trustee, successor or assignee”. Of course, this is still yet another definition of an employer under state law so it’s always important to read the definitions first.
What’s Prohibited or Required? As noted above, Employers must pay out vacation time and any other accrued fringe benefit upon termination, if it has a policy that says that it will.
Are There Any Exceptions? Not explicitly but it leaves lots of room for an employer to maneuver if it sees fit. For example, an employer could have a policy that says that employees do NOT need to be paid out vacation time upon termination. Or an employer’s policy could be silent on this issue. But employers should be mindful that under state law, Conn. Gen. Stat. Sec. 31-71f , employers must “make available to his employees, either in writing or through a posted notice maintained in a place accessible to his employees, any employment practices and policies or change therein with regard to wages, vacation pay, sick leave, health and welfare benefits and comparable matters.”
Private Right of Action or Other Penalty Allowed? Yes. Under Conn. Gen. Stat. Sec. 31-72, there is an independent cause of action allowed to employees when an employer fails to pay out fringe benefits under Sec. 31-76k. And the CTDOL commissioner can bring a claim too. The CTDOL even has an online form for employees seeking vacation pay upon termination (though it asks for the policy too).
What May Be Recovered? Up to twice the amount of the fringe benefit owed.
Any Practical Steps Employers Can Take? Yes. Review your PTO and vacation pay policies and see what they say about payment upon termination. If you don’t want to pay out accrued PTO upon termination, then best practice is to simply say so in the policy itself. But if you do have to pay it out upon termination, follow your policy to the letter.
Any Other Interesting Information or Background? Notably, this is NOT the rule in some other states. California has some very strict rules regarding accrued paid time off and payment of such PTO upon termination. Employers should have state-specific rules or at least know what law to apply in case of a termination.