Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 43 employee will cease to earn additional vacation days until he or she has used some of the accumulated time. 237 Thus, the employee would stop earning additional vacation time until the total accrued time drops below ten days. 238 In addition, the employer may enforce a “use it or lose it” policy that requires its employees to use all accumulated vacation time by a certain date or lose all or part of it. 239 A cap on accrual of vacation time or a “use it or lose it” policy, however, may result in an illegal forfeiture of earned wages if the employer fails to provide employees with adequate notice of the policy or with an adequate opportunity to use the vacation time. 240 Exactly what constitutes an adequate opportunity to use accrued vacation is not discussed in the advisory, nor have the courts addressed that issue. b. General “Leave” Category Some employers combine sick leave, 241 personal leave, vacation leave, and other types of leave into one general category called “annual leave,” “paid time off,” or “PTO.” 242 If an employer with a general leave policy designates the number of hours or days of leave that are considered vacation, when an employee terminates employment, the employer is only required to pay the employee the unused hours designated as vacation. 243 Proof of designation of vacation time can be used to rebut a complaint of unpaid wages pursuant to the Wage Act. 244 An employer offering a combined paid leave benefit that makes no distinction between vacation and other types of leave may risk the entire allotment of leave being treated as vacation. c. Designation of Accrual Rate An employer should articulate clear guidelines regarding the accrual of vacation time, including the rate of accrual. For example, a policy might provide that an employee earns vacation time at the rate of one day per month and that the day is earned on the last day of each month, or the policy might specify that an employee accrues ten days each year on June 30. Similarly, an employer that combines leave into one bank should include guidelines regarding accrual of vacation time versus other leave time. For example, an employer that provides thirty days of paid 237 Id. 238 Such caps must be applied prospect ively. Id. 239 Id. See also EDSC II, 454 Mass. at 69 (not ing that vacation pay may be “ lost by disuse”). 240 Massachuset t s At torney General Advisory 99/1. 241 Employers are not required to pay out unused earned sick t ime upon terminat ion of employment. M.G.L ch. 149, § 148C. Moreover, the Supreme Judicial Court has held that sick leave does not const itute “wages” for purposes of the Wage Act . Mui v. Massachusetts Port Auth. , 478 Mass. 710, 713 (2018); Ligotti v. Daly XXL Commc'ns, Inc. , 2018 WL 1586340, at *7 (D. Mass. Mar. 26, 2018) (relying on M.G.L ch. 149, § 148C); Mehic v. Dana-Farber Cancer Inst. , 2017 WL 637681, at *12 (D. Mass. Feb. 16, 2017) (“Without either a policy or cont ractual agreement to pay plaintiff unused, accrued sick t ime at the t ime of her terminat ion, she is not ent it led to recover under the MWA”). 242 Massachuset t s At torney General Advisory 99/1. 243 Id . 244 Id .