If a company closes down, letting all employees go and files Chap. 7, can employees get paid for their accrued vacation time?

Asked almost 5 years ago - Odenton, MD

Earlier this summer, my husband's firm closed down, letting its employees go. Company officials said the firm was filing for Chapter 7 bankruptcy but we have learned that has been switched to a Chapter 11 bankruptcy filing.

Each employee was given their last paycheck, compensating them for the days in the pay period that the company was open. However, no one was paid any of their accrued vacation or sick time.

Are they entitled to get paid for unused vacation pay, even though the company has filed for bankruptcy. Would it matter specifically if it was a Chapter 7 filing or a Chapter 11 filing (we're just not sure if the company is planning to switch it back to Chapter 7)

Is this worth pursuing?

Attorney answers (1)

  1. Mark L Rosenberg

    Contributor Level 15

    Answered . You should certainly consider filing a claim in the bankruptcy, if the accured vacation time is substantial. The bankruptcy files are public files and you can see exactly what the company filed. If the company is doing a Chapter 11 reorganization, you may be a creditor as to the vacation time.

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