Panel of the Court of Special Appeals in Maryland Declares Accrued But Unused Vacation Must Be Paid Out At Termination of Employment and the Maryland Division of Labor and Industry Now Agrees


On August 20, 2007, a panel of the Court of Special Appeals ruled that employees must be paid for accrued but unused vacation pay at the time of termination of employment. Catapult Tech. Ltd v. Wolfe (Md. Ct. Spec. App. 2007). This opinion, which contradicted two earlier cases interpreting the Maryland wage payment statute (one of which had been reversed on other grounds), was entirely unexpected to many employment law practitioners in Maryland. The decision also was contrary to the long-standing interpretation of the Maryland wage payment statute by the Maryland Division of Labor and Industry, which had a statement on its web site essentially stating that an employee was not entitled to be paid for accrued but unused vacation if the employee was advised in advance that such leave would not be compensable upon termination.

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