Skip to main content

Can an employee take accrued vacation during small business chapter 11 bankruptcy?

Selden, NY |

My employer filed chapter 11 November/2012. Just 2 weeks ago we were told we could not use our accrued vacation from 2011 due to bankruptcy. If we need time off it would have to be with no pay. Is this true and do we have to file a claim for the vacation wages?

The company is still doing business.

Attorney Answers 3

  1. There is not enough information to adequately answer this question. Are you owed wages. Did you want to get paid for the 2011 vacation time. You need to ask your employer about time away from work. The current chapter 11 case should not control the time you take off or the effect of taking time off on your future employment. The bankruptcy will affect claims that you have for unpaid wages.

  2. Your pre petition wages, vacation time, benefits, etc are claims you own against the company.

    Most of the time, there is a payroll motion filed that, among other things, requests permission from the court to honor things like vacation time.

    You and other workers need a lawyer to represent your interests. I highly recommend that you seek counsel as a joint body. Otherwise you don't know what rights you're losing.

    If you don't find local counsel that you like, I can find one for you.

    The above is general legal and business analysis. It is not "legal advise" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: for more information about my services.

  3. Lots of moving parts here, but I agree with my colleagues -- you have prepetition claims that may need to be addressed by competent local counsel with chapter 11 experience -- and keep an eye on whether you are owed wages, and those are treated differently that other types of claims.

    Good luck!

Bankruptcy and debt topics

Top tips from attorneys

What others are asking

Can't find what you're looking for?

Post a free question on our public forum.

Ask a Question

- or -

Search for lawyers by reviews and ratings.

Find a Lawyer

Browse all legal topics