Colorado: Terms of Employer’s Vacation Policy Control Whether Accrued, Unused Vacation Must Be Paid

Colorado Employers: On September 24th, 2020 the Colorado Court of Appeals issued a favorable decision for employers in regards to whether an employer must pay out accrued, unused vacation to a separated employee when the vacation policy states that the employer will not make this payout.

The Colorado Wage Claim Act (CWCA) requires employers to pay to separated employers any unpaid wages and compensation within a specified period of time after employment has ended. Historically, vacation pay was included in this bucket because it was 'earned' and therefore payable upon separation even if an employer's policy stated that earned vacation would not be paid.

Recap from Holland and Hart:

https://www.hollandhart.com/colorado-court-of-appeals-terms-of-employers-vacation-policy-control-whether-accrued-unused-vacation-time-must-be-paid-out-at-separation

Decision:

https://f.datasrvr.com/fr1/620/84923/Blount_Inc._vs._CDLE_Decision.pdf

If you are an employer and not sure how to address this policy issue, I encourage you to contact the experts at Apex HRO for an immediate policy review.