Summary

Employers in Texas are not required to provide any paid vacation time to their employees.  However, if they do provide paid vacation time, payouts of accrued leave are required under the Texas Payday Law only if such a payment is promised by the employer in a written policy or agreement. The payout would be controlled by the terms of the policy or agreement. If no such policy or agreement exists, an employer would not typically be required to pay a terminated employee for his/her accrued but unused vacation time.

Overview of State Law

No Texas or federal labor and employment law requires private-sector employers to provide paid or unpaid leave of any kind to employees.

Under Texas law, employers are not typically required to make payouts of accrued but unused paid leave, although in some instances, usually involving express contracts,  courts have required such payments to former employees.  If an employer does provide paid vacation time as a benefit and it is documented in a written policy or agreement, the Texas Payday Law does require that employer pay a terminated employee for the accrued but unused leave. The payout is controlled by the specific terms of the policy or agreement. If no such policy or agreement exists, an employer would not typically be required to pay a terminated employee for his/her accrued but unused vacation time.

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