I It Illegal to Give an Employee Extra Paid Vacation for Good Performance?
The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or holidays (federal or otherwise). These benefits are a matter of agreement between an employer and an employee (or the employee's representative). As long as the pay is not in violation of an employment or union contract, a bonus in the form of paid vacation is a matter of private negotiation between the employer and employee.
Accrued vacation pay is generally not required to be paid on termination of employment unless required by an employment or union contract. In some cases, an employee handbook is deemed a contract. Without an employment contract, the payment of accrued vacation time benefits is typically a matter of employer policy.