Yesterday was the first official day of Summer. Today my daughter graduates from high school. No doubt about it — it is vacation time.

Which brings to mind a common question in severance negotiations.

What obligation does an employer have to pay a terminating employee for accrued but unused vacation time? (What constitutes “accrued” vacation time is a question for another day.)

In New Jersey, under Botany Mills v. Textile Workers, an old and infrequently cited court decision, the answer is “all of it,” unless the employer has adopted and made available to its employees a policy that says otherwise. There are sound reasons why particular employers may want to adopt such a policy, and equally sound reasons why they might allow terminating employees a full payout of vacation time. The important thing is that the policy accurately define the rights that you want your employees to have. Conversely, terminating employees should be familiar with the policy so that they receive all compensation to which they are entitled.