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Is use it or lose it legal for vacation time in MA?

I just checked in my employee handbook and, sure enough, my friend in the next office is right. It says the company has a use it or lose it policy re vacation time so that once I earn three weeks, I can't get any more until I use some of the vacation time. So is that legal in Massachusetts? Thanks.

 
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Editor's Response

As you may know, under the Massachusetts Wage Act, accrued vacation time must be treated like any other form of wages, and terminated employees in MA must be paid their accrued vacation time.   However, in an advisory opinion from 1999, the Attorney General of Massachusetts did give a thumbs up to polices that effectively put a cap on the number of hours of vacation employees can accrue, as long as that policy was made known to the employee in advance, just as you were informed about your companies policy by the employee handbook.  So, as you accurately explained in your question, your company can cap your vacation time and, effectively, require you to take vacation before you can accrue additional time.  The advisory opinion also states that a use or lose it policy is also allowed, because it is essentially a cap on the amount of vacation time that can be accrued.
 
In an opinion from 2009 (ELECTRONIC DATA SYSTEMS CORPORATION vs. ATTORNEY GENERAL, 454 Mass. 63), the Supreme Judicial Court of Massachusetts discussed this issue and reasoned that “use it or lose it” policies are not necessarily inconsistent with the idea the that accrued vacation pay is nonforfeitable benefit.  The Court put the burden on the employee to use the vacations time, finding that, as long as the employee has a reasonable amount of time in which to use the vacation time, there is no forfeiture if the employee decides not to use the time off.  Hope that helps.

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