Colorado Vacation Carryover Request
Description
How to fill out Vacation Carryover Request?
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FAQ
Law and Policy Group Colorado high court bans use-it-or-lose-it vacation policies. Colorado employers that provide vacation cannot include a forfeiture provision in the policy, the state supreme court has ruled.
Unused Vacation Pay in ColoradoState law in Colorado does not require employers to provide vacation pay. However, justices held that if employers decide to provide vacation pay, accrued time cannot be forfeited once it has been earned. Which means all earned vacation time must be paid out to employees upon separation.
Unused Vacation Pay in ColoradoState law in Colorado does not require employers to provide vacation pay. However, justices held that if employers decide to provide vacation pay, accrued time cannot be forfeited once it has been earned. Which means all earned vacation time must be paid out to employees upon separation.
The impact of the ruling is significant, as so-called use-it-or-lose-it vacation policies, which have become commonplace for Colorado employers, are now prohibited as a matter of law under Colorado's Wage Claim Act (the Act).
The revised rule clarifies that if accrued paid time off regardless of its label is usable for vacation, then it is earned and determinable and must be paid at termination rather than forfeited, even if the leave can be used for other reasons.
Forfeiture of Accrued PTO Is Illegal As we previously reported, in June 2021 the Colorado Supreme Court in Nieto v. Clark's Market, Inc., held that Colorado's Wage Protection Rule 2.17 forbids the forfeiture of any accrued vacation pay in an employment policy or agreement.
No use-it-or-lose-it policies permitted. Under California law, vacation is treated the same as earned wages and vest as the employee performs work. Because vacation is earned proportionally as the employee works, policies requiring employees to lose vacation already earned is illegal under California law.
Colorado's HFWA allows most Colorado employees to accrue paid sick time off at the rate of one hour for every 30 hours worked, up to 48 hours per year, and allows employees to carry over up to 48 hours year-to-year.
The revised rule clarifies that if accrued paid time off regardless of its label is usable for vacation, then it is earned and determinable and must be paid at termination rather than forfeited, even if the leave can be used for other reasons.
