Leave Management, Policy, and Compliance

Ask the Expert: Must We Pay Out Vacation for Employee on Military Leave?

Question: An employee has been on military leave for 6 months.  We have been paying the difference between her base wage and her military pay. Now she is requesting to have us pay out her vacation. We do not pay out vacation unless an employee terminates employment. We also don’t payout vacation for employees on other types of leaves. Do we need to pay out her vacation?

military leave

Answer from the experts at HR.BLR.com:

Thank you for your inquiry. Yes, you should pay out the vacation. According to the federal military leave law, the Uniformed Services Employment and Reemployment Rights Act (USERRA), an employee must be permitted, upon request, to use any accrued vacation, annual, or similar leave with pay during the period of service in order to continue her civilian pay.

Although an employer may not require the employee to use accrued vacation, annual, or similar leave during a military service, the employee may request to use the paid vacation time. The employee is not entitled to use sick leave that accrued with the employer during a period of service in the uniformed services unless the employer allows employees to use sick leave for any reason (such as in a combined paid time off program) or allows other similarly situated employees on comparable furlough or leave of absence to use accrued paid sick leave. See 20 C.F.R. sec. 1002.153(a).

USERAA, however, does not require employers to pay an employee’s wages during a military leave of absence. Many employers choose to pay the difference between the employee’s regular pay and military pay, at least for a limited period of time, in recognition of the employee’s military service.