Vacation Policy Key Terms

Use vacation policy key terms to learn basic facts about this sensible business practice
By Michele Vrouvas When it comes to the benefits that today's employees have come to expect from their employers, a vacation policy is right up there with medical coverage. Companies with a standard vacation policy are sending the right message. They're showing employees they understand that everyone needs a day off sometimes, whether for personal reasons or just to recharge. If you don't offer a vacation policy, you're at a distinct disadvantage when it comes to attracting top performers. Know vacation policy key terms to get some insight into this popular employee benefit.

Fair Labor Standards Act

The Fair Labor Standards Act, also known as the FLSA, is a federal law providing minimum wage and overtime pay standards for government and private sector employees. Whether the federal government requires private businesses to pay vacation time has been an issue of ongoing concern among companies in the United States.
Try:  Go to the US Department of Labor page to find out whether and how the FLSA impacts a company's vacation policy.

Vacation deprivation

Vacation deprivation is a term that describes a distinctly American habit. Studies show that many workers in the United States do not use all of their earned vacation time and that they take fewer vacations than their counterparts abroad.
Try:  Key Organization explains the causes and results of vacation deprivation among United States workers. For example, find out how financial considerations play a role in employees' vacation plans and how the fast lifestyle in the United States contributes to vacation deprivation. You'll also learn how vacation deprivation can lead to more stress and actually reduce worker productivity.

Vacation pay

Vacation pay is any amount paid to employees while they are on vacation. Vacation pay is a concern of businesses that allow employees to take their vacation in daily increments.
Try:  Business Owner's Toolkit offers a case study that suggests how you might handle payroll for employees who take part of their vacation during one week and work straight time during the rest of the week. You'll also learn a formula for determining wages in situations like these.

Unpaid vacation time

The issue of unpaid vacation time refers to an employer's policy on whether it reimburses employees who did not take all of their earned vacation over a given time period.
Try:  The State of California's Department of Industrial Relations offers some helpful insight into this key issue. Find out how, in some states, an employer's written vacation policy is used to determine whether it must provide unpaid vacation time. Consider how California law's definition of vacation time as wages plays a role in determining an employer's responsibility to pay.

Vacation accrual

Most company vacation policies include a clause about vacation accrual, the method by which they determine how employees accumulate vacation time.
Try:  BLR offers a standard method for determining the number of vacation days employees accrue in one year. It also discusses the decision by some companies to require employees work a certain amount of time before that accrual begins.

Vacation pay at termination

Just one of the issues employers must consider when they terminate an employee is whether state law requires them to reimburse workers for vacation pay.
Try:  My Employment Lawyer, a service offered through Fortney & Klingshirn, discusses Ohio law as an example of state laws that speak to this issue. Find out the circumstances under which some state courts may award a terminated employee compensation for unused vacation pay. You'll also find out why lawyers suggest that businesses address this specific issue in their employee handbooks.