Whether you keep accruing vacation while on workers’ comp usually depends on three things: your employer’s written policy, any union contract that covers you, and your state’s wage laws. Federal law doesn’t require vacation accrual during a workers’ compensation absence, and most employers freeze it the moment you stop drawing a regular paycheck. That freeze is a policy choice, not an automatic rule, and there are situations where you can push back.
Federal Law Sets No Floor
The Fair Labor Standards Act does not require employers to offer paid vacation at all. The U.S. Department of Labor treats vacation, sick leave, and holidays as “matters of agreement between an employer and an employee (or the employee’s representative).”1U.S. Department of Labor. Vacation Leave Because federal law doesn’t mandate the benefit in the first place, there’s no federal rule requiring accrual to continue during workers’ comp leave.
That leaves the question to your handbook, your contract, or your state.
What Your Employer’s Policy Likely Says
If you aren’t in a union, the employer’s written policy is the single biggest factor. It lives in the employee handbook, your offer letter, or an employment contract. Pull it out before assuming anything, because practice varies widely between companies. Some employers continue full vacation accrual during workers’ comp leave. Others stop accrual the day you leave work. A few draw lines based on how long you’ve been out.
The most common approach ties accrual to “active” or “paid” status. Workers’ comp replaces your wages through an insurance carrier rather than the employer’s payroll, so many companies classify you as inactive or unpaid and stop the accrual clock. That result isn’t illegal. It’s the predictable outcome when federal law defers to employer discretion.
Past practice can matter more than the handbook language alone. If your employer has historically allowed vacation to keep building for other employees on comparable leave, you have a reasonable argument that the same treatment should apply to you, even if the written policy is vague. Courts examining vacation disputes often look at how an employer actually applied a policy, not just how the policy reads. Ambiguous language tends to be resolved in the employee’s favor when there’s a record of more generous treatment.
Does FMLA Require Vacation to Keep Building?
If your injury qualifies as a “serious health condition” under the Family and Medical Leave Act, your FMLA leave and workers’ comp leave can run at the same time. FMLA adds job protection that workers’ comp alone often does not: up to 12 weeks with your position preserved.
What FMLA does not do is independently require vacation accrual to continue. The regulation states that an employee’s “entitlement to benefits other than group health benefits during a period of FMLA leave (e.g., holiday pay) is to be determined by the employer’s established policy for providing such benefits when the employee is on other forms of leave (paid or unpaid, as appropriate).”2eCFR. 29 CFR 825.209 – Maintenance of Employee Benefits
In practical terms, if your employer keeps vacation accruing for people on unpaid personal leave, it should do the same for you during concurrent FMLA and workers’ comp leave. If the policy stops accrual for all unpaid leave, FMLA does not override that. What FMLA does protect is consistency: your leave has to be treated the same as comparable leave, not worse. It also protects vacation you already banked. Any benefits accrued before your leave started must be available when you return, at the same level, adjusted only for changes that affected the entire workforce while you were out.
Union Contracts Often Do More
Collective bargaining agreements frequently address vacation accrual during leave in ways that individual employer policies don’t. If you’re covered by one, read the vacation clause carefully. Many contracts state explicitly that vacation continues to accrue during workers’ comp absences, sometimes up to a specified duration. Those provisions are binding and override the employer’s standard handbook.
When a contract is silent on the issue, the outcome gets murkier. Arbitrators may look at past practice, the bargaining history between the union and the employer, and standard contract interpretation principles. If the topic never came up at the bargaining table and the contract doesn’t mention it, the employer’s default policy may fill the gap. That is why experienced union representatives push to write explicit accrual language into contracts.
State Laws That May Protect You
State law is where the biggest differences show up, and where employees are most likely to have protections they don’t know about.
The most important state concept is whether accrued vacation counts as earned wages. Roughly 20 states require employers to pay out accrued but unused vacation when employment ends, treating that time as compensation the employee already earned rather than a discretionary perk the company can revoke. In those states, vacation time that accrued before your injury is generally safe from forfeiture. Whether new vacation continues to accrue during leave is a separate question, but earned-wages states tend to interpret vacation policies more favorably for employees across the board.
Some states also restrict or ban “use-it-or-lose-it” vacation policies. If you’re in one of those states and your employer tries to zero out vacation that expired while you were physically unable to use it because of a work injury, you may have a claim. Other states allow use-it-or-lose-it policies as long as employees received clear written notice. Enforceability of forfeiture during an involuntary absence like workers’ comp varies widely, and it’s worth checking with your state labor department before accepting a lost balance.
Your Employer Cannot Single You Out
Even in states that give employers wide discretion over vacation policy, one rule is nearly universal: employers cannot retaliate against you for filing a workers’ comp claim. Most state workers’ compensation statutes contain anti-retaliation provisions. Stripping vacation accrual specifically because someone filed a claim, while continuing accrual for employees on other types of leave, would likely qualify as unlawful retaliation.
The test is whether you’re being treated differently. If your employer suspends accrual for all employees on unpaid leave regardless of the reason, that’s a neutral policy. If accrual continues for people on personal leave or short-term disability but stops only for workers’ comp claimants, that’s the kind of disparate treatment that raises a real legal question. Document your accrual balances before the injury, save the written policy that was in effect, and note how coworkers in similar situations were treated.
Steps to Protect Your Accrual
The employees who fare best in these disputes are the ones who paid attention early.
- Request a copy of your employer’s vacation and leave policy as soon as possible after your injury. If it lives in a handbook, download or photograph the relevant pages. Policies change, and having the version in effect when your leave began matters.
- Check your pay stubs or HR portal regularly. Automated systems often stop accrual the moment your status changes. If your balance stops growing, raise it in writing right away. An email to HR creates a timestamp that’s hard to dispute later.
- Save every communication about your leave: emails, letters, texts about return-to-work dates and benefits. Vacation disputes are decided on documentation.
- Ask HR directly. A written question like “Does my vacation continue to accrue during my workers’ comp leave?” forces a response you can reference later. If the answer is no, ask them to point to the specific policy provision.
When to Call a Lawyer
Most accrual questions during workers’ comp can be handled by reading the policy and talking to HR. A few situations call for legal help:
- Your employer changed the policy mid-leave. Retroactive changes that strip already-accrued benefits raise serious legal questions, especially in states that treat vacation as earned wages.
- You were treated differently from coworkers. If other employees on non-workers’-comp leave kept accruing vacation and you didn’t, a retaliation claim may be viable.
- Your union contract is ambiguous. Arbitration over contract interpretation is a specialized process, and a labor lawyer can identify leverage a general practitioner would miss.
- You were terminated during or shortly after leave and the employer refuses to pay out accrued vacation. State payout laws and anti-retaliation statutes both come into play.
Deadlines are short. Federal claims for unpaid wages or benefits under the Fair Labor Standards Act must be filed within two years of the violation, or three years if the employer’s conduct was willful.3Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations State wage-claim deadlines vary but are often similarly short. The clock starts when the violation happens, not when you discover it, so waiting until you return to work can cost you the claim entirely.