Your questions answered: Can we cash out part of an employee’s annual leave balance?

By Portner Press on October 11th, 2019
  1. Employee Management
  2. Leave Provisions

We have an employee who has accrued 55 days of annual leave.

We wish to pay out 35 days of their annual leave to bring the balance down to 20 days.

If the employee agrees, are we allowed to pay out those 35 days?

Certain rules apply when cashing out annual leave:

  • an employee needs to have at least 4 weeks annual leave leftover;
  • a written agreement needs to be made each time annual leave is cashed out;
  • an employer can’t force or pressure an employee to cash out annual leave; and
  • the payment for cashed out annual leave has to be the same as what the employee would have been paid if they took the leave.

Also note that an employer may require an award/agreement free employee to take a period of annual leave, but only if the requirement is reasonable, for example, if they have accrued an excessive amount of paid annual leave.

Different regulations apply in so many situations

That’s why the legal experts at Portner Digital are always here to help you.

Learn more.

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