Some Nevada employers owe their workers vacation pay if they quit or get laid off before they can take their allotted vacation time. Vacation pay is usually the product of an employee’s unused vacation hours multiplied by his/her hourly wage.
If an employer fails to give a worker their promised pay, then the worker may either:
- file a claim with the Nevada Labor Commissioner (in some cases) or
- sue the employer in civil court
Depending on the case, the employee may be able to recover their back pay plus interest. If the case goes to trial and the employee wins, the judge may even order the employer to pay out Nevada punitive damages.
In this article, our Las Vegas Nevada labor law attorneys discuss:
- 1. What are vacation rights?
- 2. What is the definition of vacation pay?
- 3. What are vacation pay policies?
- 4. Can I sue for vacation pay?
Nevada companies with 50 or more employees must provide .01923 hours of paid leave for each hour of work they do a year.
1. What are employee vacation rights in Nevada?
Now that Senate Bill 312 (2019) has passed, private employers with 50 or more employees have to provide .01923 hours of paid leave for each hour of work they put in a year. This new law’s leave benefits apply to full- and part-time workers. For the typical 40-hour-a-week employee, that should come to 40 hours of paid time off (PTO) per benefit year. Employees should notify their employers as soon as practicable about taking their paid leave. Employers may require new employees to wait until their 90th calendar day to take paid leave. And employers may cap an employee’s use of paid leave to 40 hours a year.
For employees with less than 50 employees, Nevada state law does not require employers to grant their workers paid — or unpaid — vacation time. It makes no difference if the worker is a salaried employee or an independent contractor, full-time or part-time. In short, vacation leave is not a right in Nevada. Employers who choose to grant vacation to their employees have broad control over how to implement leave requirements. For example, employers have the right to:
- impose a “use it or lose it” rule, where employees lose their vacation time if they do not take it by a certain date;
- cap the amount of vacation time an employee may accrue;
- decline paying employees for “accrued vacation time” if/when they quit working or get fired (as discussed in the next section);
- frontload the PTO; or
- Set a minimum increment (of up to four hours) that employees may use accrued leave at any one time.
However, employers with less than 50 employees are obligated to abide by their own vacation policies as spelled out in employee handbooks or contracts. For example, employers cannot promise employees that their unused vacation time rolls over to the next accounting period and then implement a “use it or lose it” policy with no warning.1
Note that employers cannot require their workers to find replacement workers in order for them to use paid leave.
2. What is the definition of vacation pay?
“Vacation pay” refers to paid leave given to an employee. Many companies’ leave policies permit employees to gradually accrue this paid time off as they rack up hours worked.
Leave pay is a liability to employers: When an employee uses all his/her paid leave, this liability vanishes. However, if an employee leaves the job without having used the vacation time, then the employer may have to pay the monetary value of the unused time (depending on their leave policy).
One common way to calculate the value of leave pay is to multiply the unused vacation hours an employee has left (if any) by his/her hourly rate. So if a $20-an-hour employee quits with 10 hours of unused time off, then the employer may have to pay the employee an extra $200 ($20 wage times 10 hours).2
If a worker gets a salary, commission, or piece rate, then the rate of pay is calculated by dividing the money received for the previous 90 days by the number of hours the employee worked.
Workers who do not get their vacation pay may file a claim or sue.
3. What are vacation pay policies in Nevada?
An employer does not owe an employee any money for unused paid leave if the employee manual, employment contract, or general policy either:
- is silent on the subject of leave pay, or
- explicitly states that the employer does not owe employees leave pay, or
- explicitly states that employees give up their right to leave pay under certain conditions — such as not giving two weeks notice — and the employee meets one of those conditions
But when employers promise their employees money for unused paid leave, then they are required to deliver on it. If they do not, the employee may sue the employer (as discussed below).3
4. Can I sue for vacation pay?
Withholding vacation pay is similar to withholding one’s salary.4 Employers are legally obligated to provide vacation pay if they promise to do so, such as through a:
- written policy, such as an employee handbook;
- an employment contract, or
- consistent practice, whether or not it is written down
When employers break their promise to give departing employees the monetary equivalent of their unused paid time off, the employees have two options:
- (in some cases) file an unpaid wage claim with the Nevada Labor Commissioner, or
- sue the employer
4.1. Filing a claim
Filing a claim with the Nevada Labor Commissioner is available only to (ex)employees who are owed back wages, not just vacation pay. If an employer refuses an employee’s “good faith effort” to recover the unpaid wages privately, the employee may then file a wage claim online with the Nevada Labor Commissioner.
The Labor Commissioner’s job is to investigate claims, hold hearings, and try to get employers to pay their employees — or past employees — past wages plus interest. Note that the Labor Commissioner does not investigate matters that occurred more than two (2) years ago.5
4.2. Suing the employer
Bringing a lawsuit against an employer requires more time, money, and resources than simply filing a claim with the Nevada Labor Commissioner. But if successful, a lawsuit can result in the following monetary awards:
- vacation pay plus interest,
- attorneys’ fees, and
- court costs
Furthermore, the judge may even order the employer to pay hefty punitive damages if it appears the employer knew it was unlawfully withholding unpaid wages. Punitive damages are often much greater than any back pay.6
Note that employers face misdemeanor criminal charges for violating Senate Bill 312. Employers also face an administrative penalty by the Labor Commissioner.
Also see our related articles on minimum wage, overtime pay, and paid sick leave / medical leave.
Work in California? Refer to our article on California vacation pay laws.
Legal References
- See NRS 608; Senate Bill 312 (2019), signed by Governor Sisolak. Other states with a similar paid leave law include Arizona, California, Connecticut, Massachusetts, Oregon, Vermont, and Washington. Like Maine, Nevada law allows people to use paid leave for any reason. There is no similar federal law.
- See Fair Labor Standards Act Advisor How are vacation pay, sick pay and holiday pay computed and when are they due?, Department of Labor.
- See, e.g., Ringle v. Bruton, 120 Nev. 82, 86 P.3d 1032 (2004)(“Second, Ringle argues that substantial evidence does not support the jury’s vacation pay award. The original contract provided that “vacations will accrue at the rate of 1 day per month of employment.” The parties disagreed whether Bruton took any vacations and whether Bruton lost any vacation time not used.“).
- See Employer Handbook Nevada Unemployment Compensation Program, Nevada Department of Employment, Training & Rehabilitation (“Vacation pay is wages”).
- See Forms for Employees, State of Nevada Department of Business & Industry Office of the Labor Commissioner.
- NRS 42.005.