Massachusetts Supreme Judicial Court Holds That Discharged Employees Must Be Paid Unused Vacation Time, Regardless of Employer’s Written Vacation Policy


Yesterday, the Supreme Judicial Court held in Electronic Data Systems Corporation v. Attorney General, that the failure to pay unused vacation time to involuntarily terminated employees is a violation of the Massachusetts Wage Act (M.G.L. ch. 149 § 148). The Wage Act provides that “wages” include “vacation payments due an employee under an oral or written agreement.” Although the employer Electronic Data Systems (EDS) had argued that this language meant that the terms of its written vacation policy should control whether or not an employee is entitled to a payout of vacation time, the Court disagreed.

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