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What Illinois Employers Should Know About Vacation Pay: Frequently Asked Questions

There is a lot of confusion among employers about what is legally required in Illinois regarding vacation pay for company employees. The following are some commonly asked questions:

1. Does an Illinois employer have a legal obligation to offer its employees paid vacation?

Answer: No, unless there is in place a Company policy or individual employment contract promising the employees paid vacation.

2. Can an Illinois employer have a strict policy that employees must use vacation by a certain stated date or the vacation is lost?

Answer: Yes

3. Is an Illinois employer required to pay the monetary equivalent of all earned but unused vacation to an employee who quits or is fired or retires?

Answer: Yes, the Company must pay a departing employee for all earned but unused vacation.

4. If the employee is entitled to earned but unused vacation pay, is the employee also entitled to unused sick pay or holiday pay?

Answer: In Illinois, an employee is not entitled to severance pay, sick pay or holiday pay upon separation from employment unless the employer has promised to pay in an employment contract, offer letter, employee handbook, or other agreement or document.

For assistance with vacation pay or compensation under the Illinois Wage Payment and Collection Act, contact Attorney Nancy E. Joerg who can be reached at Wessels Sherman’s St. Charles, Illinois office: 630-377-1554 or email her at

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