Do You Get Unused Time Off When You’re Laid Off? Here’s the Law in D.C., Maryland and Virginia

For the 250 workers laid off by the online BuzzFeed news site, it was bad enough to lose their jobs. But many then found that they would not get paid for the unused vacation and sick days they had accrued.

The exception: Workers in California, where state law requires it.

The disparity with workers in other states only increased the criticism of BuzzFeed for the cost-saving move during layoffs, and the company soon relented.

But BuzzFeed is not alone. The decision to not pay terminated employees for their unused paid time off is often up to the employer, as state laws vary and there is no federal law.

Paid Time Off is a Popular Work Benefit

Many public and private employers will provide a number of paid sick or vacation days to their employees. This is great for employees, not only for morale, but because it helps encourage employees to take care of themselves and their family while not worrying about lost income due to missed work.

Most of these benefits are relatively modest, but employers typically allow employees to save up paid vacation, personal or sick days so they can be used together. This means that after a few years, an employee could accrue a substantial amount of paid time off. This can come in really handy for those or who need (or want) to be out of the office for a significant period of time and still get paid.

Most people already understand this, but after the BuzzFeed layoffs, the BuzzFeed employees, as well as the general public, are learning two major lessons.

But it Can be Hard for Workers to Use Their Paid Time Off

Besides the salary it offers, many employers try to entice new hires with other benefits, such as health insurance, free lunches, free childcare, life insurance and paid time off. But many of the jobs that provide these enticing benefits are positions where taking advantage of paid time off will be almost impossible.

For example, top law school graduates who work at big law firms will probably receive two weeks paid vacation as part of their benefits package. But there’s no way new attorneys can actually take those days off if they expect to receive a bonus, obtain positive performance reviews or meet their annual billable hour requirements.

But it’s not just lawyers who can’t always take advantage of paid time off. Basically, any employee facing a never-ending workload or an inflexible supervisor can make it practically impossible to take time away from work.

Then there are industries that make it inherently difficult for workers to go on vacations or be out sick. Take the news industry as an example. A big news story can break at any time and new developments in an existing story are always possible. 

The result is employees working weekends, holidays and being glued to their email. This is one reason why BuzzFeed not wanting to pay its terminated employees for their unused paid time off is so significant: it was offering a benefit to its employees that they couldn’t take advantage of.

Employers Often Get Away With Not Paying for Unused Time Off

From a common sense perspective, it seems obvious that a terminated employee with paid time off will be compensated for their unused time off. Unfortunately, common sense isn’t very common in the real world. In Maryland, Virginia and Washington, D.C., there is no requirement for employers to pay their recently fired employees their unused paid time off unless certain conditions are met.

Maryland Laws on Paid Time Off

The Maryland Department of Labor, Licensing and Regulation states that an employee has no right to unused paid time off as long as the employer has a written policy that explains that the employer does not have to pay for the unused paid time off and the employer conveyed this information to the employee at the time of hiring.

However, if the employer has no written policy that prevents a terminated employee from receiving unused paid time off (or the employer failed to tell the employee otherwise when they were hired), then the employer must pay the terminated employees for unused paid time off. One caveat to this rule: it only applies to vacation days.

If a terminated wants to receive payment for unused sick days, then it must be expressly provided for in an employment contract or by the employer’s policy.

Virginia Laws on Paid Time Off

Virginia is unique in that it doesn’t have a specific law that addresses the payment of unused paid time off of terminated employees. But contract principles are recognized and enforced in Virginia.

So if an employer promises in an employment contract to pay terminated employees for their unused paid time off, then the employer must do so. If the employer does not, it will likely be in breach of the employment contract. 

Things get a little squishy when there isn’t an explicit employment contract. For example, if the employee handbook states that unused paid time off is payable at the time of firing, then that may also legally require the employer to abide by what it’s in the handbook.

But many employers will add language to their employee handbooks explaining that it doesn’t constitute an employment contract between the employer and the employee. So will a written policy in a handbook be enough to require the employer to pay a terminated employee his or her unused paid time off? It’ll probably take going to court to know for sure.

Washington, D.C., Laws on Paid Time Off

In Washington, D.C., employees are entitled to payment for unused paid time off, unless there is an agreement that says otherwise. In other words, the employer will have the burden of providing evidence that the employee agreed to forego payment of its unused paid time off.

The bottom line is that employees in the Maryland, Virginia and Washington, D.C. area will need to pay close attention when they are hired as to whether they can expect to receive payment for unused paid time off should they be discharged by their employer. And if they’re promised such benefits, they will be best served to get it in writing.

Tom Spiggle is author of the book “You’re Pregnant? You’re Fired: Protecting Mothers, Fathers, and Other Caregivers in the Workplace.” He is founder of the Spiggle Law Firm, which has offices in Arlington, Va., Washington, D.C., and Bethesda, Md., where he focuses on workplace law helping protect the rights of clients facing pregnancy and caregiver discrimination, sexual harassment and wrongful termination in the workplace. To learn more, visit: https://www.spigglelaw.com/contact.