Maryland's Department of Labor, Licensing & Regulation Revises Its Opinion About Vacation Pay In Light of Catapult Technology, Ltd. v. Wolf

As reported in this blog, I recently handled a case involving the issue of an employee's right to receive compensation for accrued but unused vacation pay. In Catapult Technology, Ltd. v. Wolf, a case of first impression, Maryland's Court of Special Appeals explicitly ruled that employees are entitled to receive compensation for accrued vacation pay at the conclusion of their employment, despite a provision in the employee handbook providing for forfeiture of the vacation pay.

Following the Court's ruling, I contacted Maryland's Department of Labor, Licensing & Regulation and advised them that the information on their web site concerning an employee's right to receive compensation for vacation pay was no longer a correct statement of law in view of the ruling in the Wolf case. At that time, the DLLR website contained the following statement concerning whether unused vacation is payable to the employee at termination:

"The answer to this question depends on the employer's policy, and whether this policy was communicated to the employee in advance. For example, if an employer informs employees at hiring that unused vacation leave will be lost or forfeited when employment ends, then an employee will probably not be able to claim it. On the other hand, where no policy exists or was made known in advance to a terminated employee regarding forfeiture of accrued vacation, the employee may receive the cash value of whatever unused earned leave was left -- provided it was otherwise usable."

After I contacted DLLR to advise them of the holding in Wolf, the Agency modified their view on this issue. Now, in conformity with Wolf, DLLR's position on this issue is as follows:

"When an employee has earned or accrued his or her leave in exchange for work, an employee has a right to be compensated for unused leave upon the termination of his or her employment regardless of the employer's policy or language in the employee handbook."