Can an incorporated business stop giving vacation time and take back any earned vacation time?

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Can an incorporated business stop giving vacation time and take back any earned vacation time?

Asked on December 11, 2012 under Employment Labor Law, Michigan

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Can a business, incorporated or not, stop giving employees vacation time in the future (from the time they announce this new policy forward)? Yes--so long as employees do not have employment contracts guarantying them vacation. When there is no contract, the  employer is free to set, change, or reduce benefits, including vacation, at will--the law does not, for example, require that employees get vacation, but rather leaves this  up to the employer.

However, any vacation earned prior to the change should not be taken from employees--it was part of their compensation pursuant  to which they did the work. Having done work based on an agreement, even if only implicit, that they would earn vacation days as part of their compensation (i.e. in exchange for working), such days should not be taken from them.


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