© 2025 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2025 ed. | 7 works.”33 An employer may also include a probationary period in its vacation policy, which stipulates that an employee will begin to accrue vacation time only after a set period of time, such as six months. Here again, the time frame should be clearly indicated. d. Unlimited Vacation Policies A growing number of employers have implemented unlimited vacation policies in Massachusetts. Under such policies, employees generally are free to take vacation as they wish. They do not accrue vacation time, and employers therefore do not pay out vacation time upon termination.34 Neither Massachusetts courts nor the Massachusetts Attorney General have opined on whether such policies are lawful.35 e. Changes to Vacation Policies An employer may amend the terms of its vacation policy, and any other condition of employment affecting wages, at any time.36 Any such amendments must be prospective in nature, and employees must be given advance notice regarding the changes.37 A new policy is more likely to be permissible if the employer gives the employees a copy of policy changes in advance and requires that each employee acknowledge in writing his or her understanding of the changes.38 If a new policy will result in a forfeiture of accrued but unused vacation days, employees must be given a reasonable opportunity to use the time before it is forfeited. 4. Earned Sick Time The Wage Act does not apply to earned sick time. In Mui v. Massachusetts Port Authority, the SJC recognized that “[l]ike vacation time, sick time is often accrued as one works for an employer,” but distinguished it from vacation time because “unlike vacation time, which can be used for time away from work for any reason, sick time is to be used only when the employee or a 33 Id. 34 EDSC II, 454 Mass. 63 (“the [Wage Act] requires such an employee to be paid for unused vacation time remaining at the time of involuntary discharge”) (emphasis added). 35 California has a similar law requiring the payment of accrued vacation upon separation, and at least one California Court of Appeal has weighed in on an unlimited vacation policy. See McPherson v. EF Intercultural Found., Inc., 47 Cal. App. 5th 243, 265 (2020). In that case, the Court of Appeal ruled in favor of exempt employees seeking pay for vacation time that they claimed to have accrued, despite their employer’s unlimited, no-accrual vacation policy because the employer in practice expected employees to take just two to four vacation weeks per year. The Court of Appeal, in dicta, opined that an unlimited PTO plan might avoid final-pay obligations if it is in writing and (1) clearly provides that employees’ ability to take paid time off is not a form of additional wages for services performed but rather for a flexible work schedule, including employees’ ability to decide when and how much time to take off, (2) spells out the rights and obligations of both employee and employer and the consequences of failing to schedule time off, (3) allows employees in practice to take time off or to work fewer hours instead of taking time off, and (4) is administered fairly so that it neither becomes a de facto “use it or lose it policy” nor results in inequities, such as where one employee works many hours, taking minimal time off, and another works fewer hours and takes more time off. Id. at 268-69. 36 Massachusetts Attorney General Advisory 99/1. 37 Id. 38 Id.
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