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Vacation Leave


Sick Leave


No Texas or federal law requires private-sector employers to provide paid or unpaid leave of any kind, although some amount of unpaid leave may be necessary as a reasonable accommodation in the event of a disability, pregnancy, or other condition protected under a specific statute. In the area of family or medical leave, the only employers that are required to provide up to 12 weeks of unpaid job-protected leave under the federal Family and Medical Leave Act are those with 50 or more employees stationed within 75 miles of the employee who is to take such leave, and even then the employee has to meet the various eligibility conditions in order to be entitled to the leave. However, most employers do provide some kind of paid leave, in varying amounts that are up to a company to determine for itself. If such leave is promised in a written policy or agreement, the leave is an enforceable part of the wage agreement under the Texas Payday Law. The written policy or agreement will be enforced according to what it provides.


Accrued Leave Payouts


No Texas or federal law requires employers to make payouts of accrued but unused paid leave, although in rare instances, usually involving express contracts, some courts have required such payments to former employees. That is a matter left to employers to specify in their company policies. Thus, it is very important for employers to develop a clear, preferably written, policy regarding paid leave and follow it exactly. If the policy is silent on what happens to accrued, untaken leave, it is not enforceable under the Texas Payday Law. An example of a policy that clearly states a company's position would be as follows:

Generally, ABC Company does not pay accrued [type of] leave to employees who leave employment. Any unused paid [type of] leave is forfeited upon an employee's work separation. However, unused [type of] leave may be paid out under the following circumstances:

    1. If an employee is involuntarily separated from employment for economic reasons as part of a company reorganization or a reduction in the workforce, the employee will receive the full balance of accrued, but unused [type of] leave.

    2. If an employee retires from employment pursuant to the Company's retirement policy, the employee will receive the full balance of accrued, but unused [type of] leave.

    3. If an employee voluntarily resigns from employment with at least two weeks' advance written notice, the employee will receive the full balance of accrued, but unused [type of] leave.

    4. If an employee voluntarily resigns from employment with less than two weeks' notice, but with at least one week's advance written notice, the employee will receive fifty percent (50%) of the balance of accrued, but unused [type of] leave.

Paid or unpaid leave time may not be counted toward a notice period under this policy. Any payment made under this provision will be subject to set-offs and deductions for any amounts due or owing pursuant to legal requirements and to the wage deduction authorization agreement signed by the employee.


For a simpler policy than the one above, see "Accrued Leave Payouts" in the article on the Texas Payday Law.


Remember the general rule that any written promises regarding compensation, including paid leave, should be followed exactly as written, because that is how the Texas Payday Law will enforce such guarantees. While not having a written paid leave policy can seem tempting from the standpoint that non-written leave policies cannot be enforced under the Texas Payday Law, that can lead to other problems such as lack of consistency, complaints from aggrieved and confused employees, and even discrimination complaints. Past practices sometimes become enforceable in court if a discrimination charge is based on unpaid compensation. Finally, if an employee entitled to a payout of accrued paid leave is also subject to a court order for child or spousal support, the amount of wage withholding specified in the court order may have to be made from the amount corresponding to the leave payout. For details, see the final paragraph of the topic on final pay for commissions and bonuses in the article on the Texas Payday Law in section II of the book.


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