Hello there!

Unless you have an unlimited paid time off policy, the vacation time your employee has earned for a certain year or period must be taken within 10 months after completing that year. Therefore, if your employee does not use their vacation time within that 10 months, the proverbial slate is wiped clean and they cannot tack on their old vacation days onto this new work period.

As an employer, you also have the right to schedule a vacation for your employee and have that discussion with them to ensure those days are taken before they expire. It sounds like you have a very hardworking employee on your hands – which is amazing, but you also want to provide them with open communication about time off that they are entitled to. Vacation pay must only be payed out to the employee at the end of the year if it is before the 10 month period where their vacation time expires, and if they quit or are terminated. If they stay with the company, you do not need to pay anything out at the end of the year.

Instating ETO or UTO would mean rewriting your employee’s contract and would not be the best step in my opinion. It is up to your employee when they take their vacation days and how many of them they take – if they choose to not use them, that is their choice. The specificities of vacation pay can become convoluted, so I highly recommend checking out this article navigating vacation pay contract options and our vacation pay compliance game plan, as the answer to this question can also vary depending on the jurisdiction your are in. I hope this answer helps!

-HR Insider Staff