# Encashing unused paid vacation days



## rahzaa (May 2, 2012)

Expats,

I have question. Is there any law in private sector that ensures employee can encash unused paid vacation at end of the year? Is this a standard practice or does it vary form company to company. 

Thanks!


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## rsinner (Feb 3, 2009)

I dont think there is a law and will only depend on the company policy (e.g. my current and previous employers do not allow it - take it or leave it). 
if I recall correctly, the labour law just refers to unused vacation days at the time of resignation.


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## BedouGirl (Sep 15, 2011)

rsinner said:


> I dont think there is a law and will only depend on the company policy (e.g. my current and previous employers do not allow it - take it or leave it). if I recall correctly, the labour law just refers to unused vacation days at the time of resignation.


I also think you're correct. Many companies run a use it or lose it policy with a specific timeline. I don't think there's too many companies encashing these days.


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## rahzaa (May 2, 2012)

Okay. So it not part of some labor law. My contract states: 'Any leaves including any paid leaves which are accumulated and not utilized can be encashed as per policy'. So i guess my company is one of the few that do give this option.


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## Gavtek (Aug 23, 2009)

Well I'd have the policy in writing in front of me before making that assumption....


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## Edino (Sep 22, 2013)

We had this recently verified by our lawyer for our free zone company. Paid vacation days are per law mandatory to be provided, and should not be paid in cash (unless its the end of employment and balance is left)

And forfeiting unused paid vacation days because they where not taken during a calendar year may give the employer an additional liability. Technically, if this would happen, an employee could at the end of your employment term approach Labor, advising them they have not provided paid vacation days... The employer may loose the case, and may have to pay out those days + fine.

The policy in our company is as such that the employee needs to ensure that vacations days are consumed within the calendar year, with a 3 months grace period into the next year. If the employee still does not take leave, the manger will force it.


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## rahzaa (May 2, 2012)

Edino said:


> We had this recently verified by our lawyer for our free zone company. Paid vacation days are per law mandatory to be provided, and should not be paid in cash (unless its the end of employment and balance is left)
> 
> And forfeiting unused paid vacation days because they where not taken during a calendar year may give the employer an additional liability. Technically, if this would happen, an employee could at the end of your employment term approach Labor, advising them they have not provided paid vacation days... The employer may loose the case, and may have to pay out those days + fine.
> 
> The policy in our company is as such that the employee needs to ensure that vacations days are consumed within the calendar year, with a 3 months grace period into the next year. If the employee still does not take leave, the manger will force it.


When you 'should not be paid in cash'. Do you mean it is illegal to pay in cash?


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## Stevesolar (Dec 21, 2012)

rahzaa said:


> When you 'should not be paid in cash'. Do you mean it is illegal to pay in cash?


Hi,
No - they meant that you are not supposed to be paid instead of taking a holiday.
Only exception is at end of contract - unused holiday can be paid at equivalent daily rate, per untaken day.
Cheers
Steve


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