Employees’ Entitlement to Vacation Pay Accrued Upon Termination of Employment

S T A T E O F T E N N E S S E E OFFICE OF THE ATTORNEY GENERAL 500 CHARLOTTE AVENUE NASHVILLE, TENNESSEE 37243 August 17, 2000 Opinion No. 00-132 Employees’ Entitlement to Vacation Pay Accrued Upon Termination of Employment QUESTION Whether, under Tennessee law, an employee employed in Tennessee is entitled to pay for accrued vacation leave upon the employee’s termination after giving proper notice under the employer’s employment policies. OPINION Yes, an employee who has accrued vacation leave under his or her employer’s employment policy pertaining to the accrual of vacation leave is entitled to receive payment for accumulated vacation leave upon termination of employment. ANALYSIS Under Tennessee law, “the final wages of an employee who quits or is discharged shall include any vacation pay or compensatory time that is owed to the employee by virtue of the company policy or labor agreement.” Tenn. Code Ann. § 50-2-103(a)(3) (Repl. 1999). However, nothing in the statute mandates that employers must provide vacations, either paid or unpaid, nor does it require that employers establish written vacation policies. Id. _____________________________________ PAUL G. SUMMERS Attorney General & Reporter _____________________________________ MICHAEL E. MOORE Employees' Entitlement to Vacation Pay Accrued Upon Termination of Employment Whether, under Tennessee law, an employee employed in Tennessee is entitled to pay for accrued vacation leave upon the employee's termination after giving proper notice under the employer's Yes, an employee who has accrued vacation leave under his or her employer's employment policy pertaining to the accrual of vacation leave is entitled to receive payment for accumulated vacation leave Under Tennessee law, "the final wages of an employee who quits or is discharged shall include any vacation pay or compensatory time that is owed to the employee by virtue of the company policy or labor agreement." Tenn. Code Ann. § 50-2-103(a)(3) (Repl. 1999). However, nothing in the statute mandates that employers must provide vacations, either paid or unpaid, nor does it require that employers establish Page -2- Solicitor General _____________________________________ E. BLAINE SPROUSE Assistant Attorney General Requested by: The Honorable Randy McNally Senator, 5 Senatorial District th 302 War memorial Building Nashville, Tennessee 37243-0205 Senator, 5ᵗʰ Senatorial District