Generally, vacation pay, holiday pay, bonuses, sick leave and severance pay are examples of wage agreements, which may be made between employers and employees as a part of the employee’s total compensation package. There is no requirement to offer these benefits. But you are required to honor any already established policy or agreement relating to the payment of benefits such as accrued vacation or severance pay upon termination. If the employee qualifies and is eligible for benefits, you should pay those upon termination as well. You want to verify with your state law as some states may vary.
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