Q. Must I offer vacation time to my employees? If I do, must I pay terminated employees for their unused vacation time?
A. No and yes (but maybe not). The North Carolina Wage and Hour Act expressly provides, “No employer is required to provide vacation pay plans for employees.”
When a vacation benefit is provided, terminated employees are generally entitled to be paid any accrued but unused vacation time. In order for the vacation time to be forfeited upon termination, employees must be notified in advance of the forfeiture policy, either in writing or through posted notices.