Employers are often unclear as to their obligations to pay employees for accrued vacation-time at the end of employment. The reason for this confusion is understandable, as Maryland has unique laws on this issue which are counterintuitive and which expose unsuspecting employers to substantial liability.
Unused vacation leave constitutes a “wage” under Maryland law. Accordingly, the default rule is that, upon termination of employment, employees are entitled to full payment for all of their accrued leave. When employers fail to pay employees for their accrued vacation leave, Maryland law provides that employees can sue their employers for three times the amount of the leave owed, plus collect for all of their attorneys’ fees.
However, Maryland employment law also provides a simple escape for employers. Maryland employers are not required to pay accrued leave when they simply provide employees with a written policy defining the leave benefits and which expressly provides that accrued leave is not payable upon the conclusion of employment.
The Maryland employment lawyers at Luchansky Millman work closely with employers to structure personnel policies which will carry out employers’ goals and minimize their exposure to liability. Contact us today to discuss how we can implement policies to help protect your business.