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Can an employer withhold a final paycheck as reimbursement for advanced vacation pay?

Chelmsford, MA |

If an employer advances an employee his/her vacation pay before it is accrued and the employee quits; is it in the employers rights to withhold the final paycheck of the employee as reimbursement of the advanced vacation pay?

company handbook clearly states the rates in which vacation pay is accrued, company advances vacation pay upon employee request

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Attorney answers 4


I have never looked into this specific situation, but I think the answer to your question may turn on whether the employee was entitled to the vacation pay that he or she received. I'd be interested to hear what others think, but I see two plausible arguments: first, that the advanced vacation time was not earned, and so the employee was not entitled to any further payment; second, and more likely, the advance was a loan to be repaid in addition to the wages due and owing to the employee. It would probably be safer for the employer to pay wages due and owing, and settle the loan in some other way. This is just an educated guess based on the limited information provided. Others may have more information, but you really need to sit down with an attorney who knows your specific situation, and you should not rely on the general conversation on this website.

Christopher Vaughn-Martel is a Massachusetts lawyer with the firm of Vaughn-Martel Law in Boston, Massachusetts. All answers are based on generalized Massachusetts law and the limited facts presented by the questioner. All answers are provided to the general public for educational purposes only and no attorney-client relationship is formed by providing an answer to a question.


I don’t disagree with Attorney Vaughn-Martel, but I would add that an employee’s right to receive his/her paycheck is governed by MGL c.149 s.148. Simply put, Massachusetts employers are required to pay their employees for all hours worked …period, end of story. Failure to do so can subject that employer to treble damages. Turning next to the employer’s desire to recoup the advance on vacation pay, MA employers can make deductions from an employee’s pay only where there exists a loan or pay advance that is undisputed by the employee, and/or where there has been a theft, misappropriation or embezzlement that has been proven in Court, and/or where a court orders the employee to repay the employer. To do otherwise is tantamount to engaging in self-help. Good luck and best regards, Rob Fortgang - Employment Law Attorneys serving Massachusetts and Connecticut / 800-932-6457 / 413-658-8500 / 774-329-3412

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Sounds strange for an employer to advance vacation pay before it is accrued but perhaps this is possible near the start of a new calendar year. Check your employee handbook to see if it is spelled out in any detail. Even if handbook spells this out the employer is still obligated to promptly pay for actual time worked under the state statute mentioned in the other replies. Should be easy to reconcile vacation and make a final payment. Steve


Contact your State Department of Labor. If your employer doesn't have something in writing, detailing the terms of advanced vacation pay, they are probably out of luck.