Labor and Employment

Does My Employer Have to Provide Holiday, Sick, and Vacation Pay?

By Lisa Guerin, ​J.D., Boalt Hall at the University of California at Berkeley
Learn whether you're entitled to holiday, sick, or vacation pay.

Although many employers offer paid holidays, sick days, and vacation time as part of their benefits packages, they aren't required to do so by federal law. The federal Fair Labor Standards Act, the primary law regulating wages and hours, requires employers to pay employees only for the hours they work, not for the hours they take off.

However, state and local laws may require paid time off, at least in some circumstances. And, if your employer chooses to offer paid vacation time, state law may require your employer to pay you for any accrued but unused paid time off when you leave your job.

Paid Holidays Are Not Required

Many employers offer a certain number of paid holidays per year as part of their benefits packages. But employers are not legally required to pay employees for holidays on which they don’t work. Employers are also not required to provide any special pay for holidays on which employees do work. (However, an employer might have to offer time off as a reasonable accommodation for employees with religious beliefs. See Does Our Company Need to Provide Time Off for Holidays? to learn more.)

Rules for Paid Sick Leave

According to the Bureau of Labor Statistics, about 70% of all private employers offer some paid sick leave to their employees. While federal law doesn’t require employers to provide paid sick time, a few states (and some cities) do.

A growing number of states—including California, Connecticut, Massachusetts, and Oregon (among others)—have passed paid sick leave laws, requiring employers to provide at at least a few days of sick leave each year. The rules for accruing, using, and carrying over unused sick leave vary from state to state. Typically, employees earn sick leave by working a certain number of hours. In California, for example, employees earn one hour of paid sick time for every 30 hours worked, up to a maximum of 48 hours per year. However, employers can limit employees to using only 24 of these hours in a year.

Vacation Time Payouts

Federal and state law do not require employers to provide paid vacation days. Many employers choose to provide this benefit, however, for practical reasons and as a matter of custom.

An employer that chooses to offer paid vacation might have to pay it out when the employment relationship ends, depending on state law. More than half of the states require employers to pay out accrued, unused vacation time when an employee leaves the company. Some states, like California, require all employers to pay out unused vacation time. In other states, such as New Jersey, employers must pay out unused vacation time only if their company policies require them to do so.

An Employment Lawyer Can Help

Is your employer failing to provide paid sick leave as required by state or local law? Or is your employer refusing to pay out unused vacation time at the end of your employment, as required by your state’s law? If so, consider talking to an experienced employment lawyer.

Paid sick leave laws are fairly new. An employment lawyer can explain what the law requires and help you negotiate with your employer to get the time off you need. In the case of unpaid vacation, a lawyer can help you demand your wages or file a wage claim with your state’s labor department.

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