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Should NH require employers to compensate workers for vacation time they earned, but were unable to take due to the needs of the business?

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New Hampshire legislators are considering a change to state laws that govern how companies treat employee vacation time.

Currently in New Hampshire, companies can maintain a “use it or lose it” policy, which means that employees’ ability to use earned vacation hours simply expires at the end of a certain time period, which usually coincides with the calendar year-end.

HB 1201, a bipartisan bill sponsored by Representatives Andrew Renzullo (R-Hillsborough) and Michael Cahill (D-Rockingham), would require employers to pay employees for earned vacation time they were unable to use because of the needs of the business.

The bill states that when an employee reaches the end of their vacation accrual period, the employer shall grant them an additional 90 days in which to take any unused vacation. If at the end of that extension, the employee has been unable to take their vacation, they will be paid for any unused time.

However, employees who simply neglect to take their vacation time, or who can’t do so for personal reasons, could still lose their earned vacation hours.

The bill recently passed the House and is being considered by the Senate.

Update: The Senate voted down HB 1201 on April 26, 2018.

Arguments for and against changing NH’s vacation rules

Those in favor of eliminating ‘use it or lose it’ argue that employees have legitimately earned their vacation hours. They argue that if an employee is unable to take their vacation due to the needs of the business, it should not be forfeited.

“Once granted, the vacation pay belongs to the worker, not the employer.”

- Rep. Michael Cahill, D-Newmarket

Opponents argue that vacation is a discretionary benefit, and compliance with a law such as this would establish an unnecessary burden on companies, making New Hampshire a less attractive place to do business.

“Our basic premise is it is inappropriate and unwise for the government to force a one-size-fits-all benefit package for the private sector,”

- David Juvet, senior vice president of public policy for the Business & Industry Association

Do you think companies should have ‘use it or lose it’ vacation policies? Tell us what you think in the comments below.

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