can I be paid my accrued vacation?

A regular reader enjoyed our post on vacation entitlement but laughed at the idea of actually being able to take 2-3 solid weeks of vacation.  He personally has accrued some 10 weeks vacation and during these recessionary times he is wondering if he could actually be paid the cash (instead of taking the vacation days).  Good question!

Because he is in Vancouver, BC we need to review the BC Employment Standards on annual vacation payment.  First, you need to verify if (1) you get paid your vacation entitlement on each pay cheque or (2) you ‘bank hours’ to be taken later.  As you can tell from his question he banks holiday.  In this case the BC Employment Standards act states:

Vacation pay is payable at least seven days before the start of the annual vacation, or on regular pay days if agreed to in writing by the employer and the employee.

Most companies pay on regular pay days for ease in administration.  You’re already getting paid every two weeks so just keep it coming.

That’s all great but this assumes that I actually take the vacation in the year it is earned!  What about carrying over?

According to the BC Employment Standards, their assumption is that: an employer must make sure an employee takes all vacation within 12 months of the employee becoming entitled to it.  Uhm, ya right, clearly they don’t work in the tech industry.  Yes, companies encourage their employees to take vacation (lest they get burnt out) but not all of it is used.

What if I didn’t take it within 12 months of becoming entitled?

Now that is where it gets fuzzy.  Some companies have a ‘use it or lose it’ policy which means that if you didn’t take the vacation within the 12 months of becoming entitled you lose it.  This is a bit harsh for a small company - where the expectation is that you will do anything for the success of the venture.  So, small companies just essentially allow you to carry it over in hopes that eventually you will take it or you will get a large cheque on exit.  The fine print on exit is:

If an employee ends his or her employment, an employer has six days to pay all outstanding wages, including any outstanding annual vacation pay. If an employer terminates an employee, the employer must pay all outstanding wages, including any outstanding annual vacation pay, within forty-eight hours.

So, what about our reader who is not exiting?  His company does not have a ‘use it or lose it’ policy so it is a genuine liability that is owed to him therefore he can request payment for the unused vacation time.  As cash is a precious commodity at any company I asked him to speak with his Controller to make sure there was available cash to accommodate his request (which there is) and also reminded him it is subject to source deductions.