Does an employer has to pay their employees earned vacation unless the employer files a Chapter 7?

I am currently a store manager for a shoe company. The company is in the process of liquidating their assets, however before the liquidators took over I was approved for a paid vacation which I have earned. Does my ex-employer have to pay me my earned vacation? Is this true and if I am on vacation and a Chapter 7 is filed will the company be responsible for paying out the days taken of vacation before the Chapter 7 was filed? Should I get the approved vacation on paper as well?

Asked on January 17, 2013 under Employment Labor Law, Louisiana


M.T.G., Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

This question is much more complicated than it appears.  You are what is known as an unsecured creditor in a bankrupcy proceeding by your employer. An unsecured creditor is a creditor without a valid lien or mortgage against property of the person filing.  If the person filing has nonexempt assets, unsecured creditors may file claims with the court within 90 days after the first date set for the meeting of creditors.  The trustee will examine these claims and file objections to those deemed improper.  When the trustee has collected all of the person’s nonexempt property and converted it to cash, and when the court has ruled on the trustee's objections to improper claims, the trustee will distribute the funds in the form of dividends to the unsecured creditors according to the priorities set forth in the Bankruptcy Code.  Domestic support obligations, admin­istrative expenses, claims for wages, salaries, and contributions to employee benefit plans, claims for the refund of certain deposits and tax claims, are given priority, in that order, in the payment of dividends by the trustee.  If there are funds remaining after the payment of these priority claims, they are distributed pro rata to the remaining unsecured creditors.  In chapter 7 cases filed by consumers, unsecured creditors usually get nothing.  So file your claim with in the 90 days.  Good luck.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.