South-Western Legal Studies in Business

Employees in Nebraska Must Be Paid for Unused Vacation Time When They Quit

Nebraska high court held that by state law employees who quit or are dismissed must be paid the value of “agreed to” benefits, such as the value of unused vacation time and the trial court may award attorney fees in such cases.

Topic Employment Law
Key Words

Vacation Time; Payment; Resignation

C A S E   S U M M A R Y

Four employees, who had between one to three weeks accrued vacation time, resigned their jobs at Strategic. They demanded payment for the unused vacation time, but Strategic refused. The company employee handbook stated: “Upon termination, employees will not be paid for unused vacation time.” The district court held that the statement in the handbook conflicted with state law and so was void. It awarded payment for vacation time and attorney fees. The appeals court reversed. The employees appealed.


Reversed and remanded. The provision in the handbook was void and unenforceable since it conflicted with state law on the issue of payment for unused vacation time. Vacation time was an “agreed to” benefit that could not be revoked after the employees quit. Under the state’s Wage Payment and Collection Act, the trial court properly awarded attorney fees.


Roseland v. Strategic Staff Management, Inc., 722 N.W.2d 499 (Sup. Ct., Neb., 2006)

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