Department of Human Resource Management
Policies and Procedures Manual
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Policy Number: 4.10 - Annual Leave
Efft. Date: 9/16/93 Rev. Date: 7/10/04

Application:  Classified employees.

Permits agencies to provide paid leave to employees for vacation or other personal purposes.

Accrual Rate The rate at which an employee earns paid time off. For annual leave, the rate is based on the years of salaried state service credited to the employee for this purpose and the percentage of hours worked in a 40-hour workweek.

Anniversary Date

Date used in the Personnel Management Information System (PMIS) to calculate state service for annual leave and other purposes. This date is adjusted to account for periods of broken service, Leave Without Pay (LWOP) except as noted below, etc. See PMIS manual for detail.

Annual Leave

Paid time off accrued by employees and available for personal use as approved by agency management.

Classified Employee

Term used to identify employees in positions covered by the Virginia Personnel Act. (See Policy 2.20, Types of Employment– Covered Employees.)

Leave Year Period from January 10 through January 9.
Maximum Carryover The unused accrued annual leave balance an employee may carry from one leave year into the next.
Maximum Payment The unused accrued annual leave for which the employee may receive payment upon separation or certain other status changes.
State Service Includes all periods of salaried state service in all branches of state government.
General Provisions
Determining The Accrual Rate

In general, all periods of salaried state service count in setting the accrual rate. Counted service includes all:

  • salaried state service in positions covered and not covered by the Virginia Personnel Act, and
  • full or part-time salaried positions, and
  • salaried state service that is broken or consecutive.

Upon rehire into a classified position, the employee’s annual leave accrual rate calculation includes all cumulative periods of salaried state service. Periods of Leave Without Pay of more than 14 consecutive calendar days normally do NOT count as service. Adjustment of the leave anniversary date is required to record such LWOP periods.

EXCEPTIONS: The following types of Leave Without Pay do not require adjustment of an employee’s leave anniversary date:

  • Military Leave Without Pay (see Policy 4.50);
  • LWOP-Layoff if the employee returns to state service (see Policy 1.65); and
  • LWOP under Temporary Work Force Reduction (see Policy 1.65).

The accrual rate for annual leave, the maximum amount of accrued annual leave that an employee may carry over from one leave year (January 10 – January 9) to the next, and the maxi-mum amount of annual leave payable upon separation from state service are determined as shown in the following chart.

Full-Time Classified Employees
Years of Service
Pay Period Accrual Rate
Maximum Carryover
Maximum Payment
under 5 years
4 hours
192 hours
(24 days)
192 hours
(24 days)
5-9 years
5 hours
240 hours
(30 days)
240 hours
(30 days)
10-14 years
6 hours
288 hours
(36 days)
288 hours
(36 days)
15-19 years
7 hours
336 hours
(42 days)
288 hours
(36 days)
20-24 years
8 hours
384 hours
(48 days)
336 hours
(42 days)
25 years or more
9 hours
432 hours
(54 days)
336 hours
(42 days)


“Q” and “P” Status Classified Employees

“Q” classified employees must work at least 32 hours (80% of a 40-hour per week schedule) and “P” classified employees must work at least 20 hours (50% of a 40 hour per week schedule) to earn annual leave, and will accrue annual leave at a rate proportionate to the number of hours worked.

Example: A classified employee with three years of service credit who works 24 hour per week (60% of full time) will accrue 2.4 hours of leave (4 hours x 0.6) for each semi-monthly period of service.


Payout and Carryover Rates

Payout and Carryover rates for employees in “Q” and “P” status are not reduced proportionately, but are based on total years of service

Employees on STD

STD is a paid leave status. Employees continue to accrue annual leave at the pre-disability rate for up to 90 consecutive calendar days.

NOTE: Employees who are working with restrictions or modifi­cations while on STD continue to accrue their pre-disability rate of annual leave. If these employees subsequently stop working and return to non-working STD, annual leave will continue to accrue for 90 calendar days.

Employees on LTD–Working

Employees accrue annual leave during LTD–Working status. The rate of accrual is determined by the employee’s years of state service and percentage of hours worked.

Example:  An employee with 12 years of service is working 32 hours per week (80% of a 40-hour schedule) on LTD–Working status. His leave accrual rate is 4.8 hours per pay period (6 hours x 0.8).

Timing and Rate of Accrual

Annual leave accrues at the end of the day on the 9th and the 24th of the month, the end of each pay period. It is credited to the employee and available for use on the first day of the next pay period. An employee must have worked or have been on paid leave for the entire pay period in order to accrue annual leave.

Note:  New or re-hired employees who start work on the first available work day after the start of a new pay period will be designated as having started work at the beginning of the pay period.
When Annual Leave Does Not Accrue

Annual Leave does NOT accrue in the following situations:

  • during any semi-monthly pay period when (a) the employee is on leave without pay (including leave sharing), or (b) no work is performed by the employee (e.g., 9-10-11 month employees in their non-working times);
  • after 90 consecutive calendar days of leave with pay, regardless of the type of leave to which the absence is charged, including short-term disability (STD) under the Virginia Sickness and Disability Program (VSDP, Policy 4.57). A return to work for a full pay period interrupts the count of 90 consecutive calendar days of leave with pay. Ifanother period of Leave With Pay occurs, a new 90-day period begins and the employee continues or resumes leave accrual;
  • when an employee is suspended (LWOP) pending the results of an official investigation or of court action or placed on disciplinary suspension (see Policy 1.60, Standards of Conduct), except that:
    • if a suspension extends into a second pay period, accrual of annual leave shall resume in the second pay period unless the period of suspension exceeds 15 calendar days; and
    • if a suspension extends into a third pay period, accrual of annual leave shall resume in the third pay period;
  • when an employee is on Leave Without Pay-Layoff or Temporary Work Force Reduction non-working status.
  • when the employee is in non-working Long Term Disability (LTD) status through VSDP.

Note: The period of layoff (up to 12 months) is credited as service for establishing the accrual rate when the employee returns to state service (see Policy 1.30, Layoff); and the period of Military Leave Without Pay is credited as service for establishing the accrual rate when the employee returns to state service (see Policy 4.50).

Carryover and Payment Limits

Unused accrued annual leave may be paid to the employee when he or she separates from state service and in cases of certain changes in status as outlined in this policy. The chart above shows the maximum amounts of accrued annual leave that may be paid.

Unused accrued annual leave may be carried forward from one year to the next (on January 10) only up to the maximum amounts stated above.

Exception: Agency heads may grant an exception to the limit of accrued annual leave that may be carried over into the next year when employees have not been allowed to use their leave because of agency work demands over a substantial period of time. Such exceptions should be given in writing and should indicate the timeframe during which the employee must use the additional leave time.

Exception: Agency heads may grant an exception to the maximum annual leave payout for separating employees who are unable to use previously requested annual leave because of an on-the-job injury that renders them permanently disabled.

Policy amended per Secretary of Administration effective July 17, 2012.

Extended Carryover for Members of Military Forces

Accruing Military Bank Leave

At the end of the leave year (January 10 – January 9), a full-time state employee who is a member of the organized reserve forces of any of the armed services of the United States or of the Virginia National Guard may carry forward accrued annual leave hours without limitation. These hours above the normal carryover limits will be designated as Military Bank leave and held for use only during periods of active military duty as provided by the Code of Virginia, § 2.2-2903.1. (See Policy 4.55, Military Leave.)

Military Bank hours shall transfer with the employee from one full-time state position to another. Upon termination of state employment, any remaining Military Bank leave is forfeited. Military Bank leave is not paid out, and it may not be converted to Annual Leave or any other leave type.

To qualify to accrue Military Bank leave, the employee must:

  • be designated as MR (military reserve) or NG (National Guard) in his or her official Personnel Management Information System (PMIS) record, and
  • submit a completed Application for Military Leave Bank certifying eligibility to accrue Military Bank leave.
Requesting and Using Leave

Employees cannot use annual leave until it is accrued. Hours accrued in one pay period are available for use the following pay period.

EXCEPTION: Annual leave may be provided to employees in advance as an Exceptional Recruitment and Retention Incentive Option. See Policy 2.10, Hiring, Policy 3.05, Compensation, and section on Leave as an Incentive Option, below.

Agency Approval

Employees must request and receive approval from their supervisors to take annual leave. Employees should make their requests for leave as far in advance as possible. When practical, and for as long as the agency's operations are not affected adversely, an agency should attempt to approve an employee's request for annual leave. However, supervisors may deny the use of annual leave because of agency business requirements. Approval of leave may be rescinded if the needs of the agency change.

Written (including e-mailed) requests and approvals for annual leave are recommended to provide documentation.

If an employee could not have anticipated the need for a leave of absence, the employee should request approval for the leave as soon as possible after leave begins. In reviewing the request for approval, the agency should consider all relevant matters, including

  • the circumstances necessitating leave,
  • whether the employee should have anticipated the need, and
  • the promptness with which the employee contacted the agency.

Agencies may establish additional procedures consistent with this policy. Employees should request leave in compliance with their agencies’ procedures. Leave not requested in accordance with agency procedures may be denied.

Schedule Adjusting

An employee taking approved annual leave may be asked to work additional hours on his or her day off. With the approval of the employee, the agency can substitute the additional hours worked for the annual leave hours, thus reducing or eliminating the need to use the employee’s annual leave.

The intent of this provision is to give mutually beneficial flexibility to employee and agency. It is not intended that employees be prevented from appropriate use of annual leave.

Unapproved Leave

When an employee takes leave time that was requested but not approved, the employee will be subject to the following agency actions:

  • the absence will be designated as unauthorized;
  • the employee will not be paid for the time missed; 
  • because the employee has experienced Leave Without Pay, he or she will not accrue annual or traditional sick leave for the pay period(s) when the absence occurred; and
  • the agency may also take disciplinary action under Policy 1.60, Standards of Conduct.

Suspension Pending Investigation or Outcome of Court

Although employees are on LWOP during suspension pending investigation or outcome of court proceedings, employees may use annual leave to continue receiving pay.

Leave on Final Workday

Employees may request and, if approved, use annual leave on their last scheduled workday before separation from state service, including retirement. Annual leave balances remaining after separation will be paid up to the maximum as provided in this policy.

Using Annual Leave While Receiving VSDP Benefits

Annual leave may be used to receive full pay during periods of STD or LTD-Working disability benefit of less than 100% (hour for hour). (See Policy 4.57, Virginia Sickness and Disability Program.)

Leave Sharing

Employees may donate from their accrued annual leave balance to other employees who are eligible to receive the donation according to the criteria and procedures in Policy 4.35, Leave Sharing. Donations are typically in 8-hour increments. However, agencies have the authority to designate lower amounts they will accept.


An employee in the Traditional Sick Leave program may use annual leave or other appropriate leave to supplement Workers’ Compensation benefits in order to receive his or her full salary upon completion of receipt of 92 days of agency supplement. (See Policy 4.60, Workers’ Compensation.)

Leave Accrued, Used, or
Paid in Error

Each employee is accountable for knowing his or her correct leave balance and accrual rate. The failure of an agency’s systems or errors by responsible employees does not remove that responsibility. If it is discovered that an employee has accrued or used annual leave in excess of the amount to which he or she was entitled, incorrect balances must be corrected, and the employee may be required to repay the agency for leave taken in error. Repayment may be made by:

  • deducting the excess hours from the employee’s current leave balance, if adequate;
  • deducting from future accruals until the amount of over-use is repaid;
  • deducting the equivalent value of the leave time from the employee’s pay over a time deemed reasonable by the agency head or designee; or
  • a combination of methods as deemed appropriate by the agency head or designee.

A written repayment agreement is required. If the employee does not complete repayment before separating from state service, the outstanding amount may be deducted from the final salary or leave payment.

Certain changes in employee status affect the accrual, use, retention, and/or payment of annual leave.
From Classified to
Classified Position
An employee who is transferred, promoted, or demoted from one classified position to another classified position in the same or a different agency retains his or her accrued annual leave balance and accrual rate.
From Classified to Non-Classified Position

An employee who transfers from a classified position to a non-classified position must be paid in a lump sum from the original agency up to the allowable maximum for his or her annual leave balance. Exception:  If the agency with the non-classified position agrees to accept the leave balance, it may be transferred.

An employee who moves from a classified position to an “at-will” position may elect to retain an annual leave balance up to the maximum carryover amount for his or her years of service. If the employee does not return to classified service, the retained annual leave will be paid out up to the maximum payment level for the employee’s years of service. The payment rate is based on the employee’s last salary in a classified position. Payment is made by the last agency where the employee had the classified service.

From Non-Classified to Classified Leave balances accrued by salaried employees in non-classified state positions may be transferred when the employee moves to a classified position only if (1) the leave was accrued at the same (or lower) rate as classified employees accrue and (2) the receiving agency chooses to accept the accrued balance.
Reducing Work Hours Current leave balances will be retained when an employee reduces work hours and continues in a classified status. An employee’s accrual rate will change in proportion to his or her reduced work hours.
Short-Term Disability Short-term Disability (STD) is a paid status. Annual leave balances are retained and may be used according to VSDP guidelines to supplement salary.
Long-term Disability Working Employees in LTD-working status retain their annual leave balances and may use them to supplement the disability benefit up to the employee’s pre-disability salary. Employees accrue annual leave proportionate to hours worked in a 40-hour workweek.
Long-term Disability Employees who participate in the Virginia Sickness and Disability Program must be paid up to the maximum allowed for any annual leave hours remaining when beginning long-term disability (LTD) status. (See Policy 4.57, Virginia Sickness and Disability Program.)
Leaving State Service

Employees will be paid for their accrued annual leave balance not to exceed the maximum payment amount when separating from state service by resignation (including resignation from layoff status), retirement, termination or death.

Payment at an employee’s death shall be made to the Administrator or Executor. If there is no Administrator or Executor of the employee’s estate, payment shall go to the surviving spouse, or if none, to the next of kin in accordance with §64.1-123 of the Code of Virginia.

Rescinding Resignation

The agency may choose to accept an employee’s request to rescind his or her resignation within 30 calendar days of separation. If the agency accepts the request to rescind the resignation the PMIS transaction should be changed to reflect a leave without pay for the period of separation; thus the employee will not experience a break in service. Upon agency approval an employee may use appropriate accrued leave to cover the absence.

If the employee received payment for annual leave, he or she may recover the accrued balance and any additional leave that was over the maximum payout amount by reimbursing the agency the amount of payment received at separation. Balances will not be restored until full payment has been made.

Return or Reinstatement

If an employee leaves classified state service and is paid for his annual leave balance, then returns to a classified position within 180 calendar days, he may buy back the annual leave by reimbursing the full amount he received to the agency that paid him. The amount of annual leave restored will not exceed the maximum payout amount. That is, if the employee had hours above that amount at separation, those hours are not restored at reinstatement.

Additionally, if:

  • an employee returns to a classified position within 180 calendar days of the beginning of Long-Term Disability, he can buy back the annual leave for which he was paid by reimbursing the full amount, or
  • if an employee returns from leave within 180 calendar days of receiving payment for his annual leave balance while on LWOP he can buy back the annual leave for which he was paid by reimbursing the full amount received.

Payment may be by lump sum or according to a payment schedule set by the agency head. Such leave is not available for use until full reimbursement has been made

Reinstatement After a Grievance

When an employee has been reinstated to state service as a result of a grievance determination, the employee may have his or her annual leave balance restored by re-paying the amount the agency paid him or her for annual leave.

  • Balances will not be restored until the full payment has been made.
  • If the employee is awarded reinstatement back to the date of termination or suspension, the employee will receive any annual leave accruals he or she would have received during that time period and the timeframe will not result in a break in service.

Suspension pending investigation or court action:

  • If the investigation results in no disciplinary action, any Annual Leave applied to the period of suspension shall be reinstated and any accruals not received will be credited to the employee’s annual leave balance.

Disciplinary suspension:

Disciplinary suspensions under Policy 1.60, Standards of Conduct, are without pay. Employees may not use Annual Leave to avoid pay loss during a disciplinary suspension.

Military Leave

When an employee goes on Military Leave, all or part of annual leave balances may be:

  • applied to the period of absence due to military service to continue paid status;
  • paid up to the allowable payment amount at the time of placement on leave without pay; and/or
  • retained until reinstatement from military leave.

Agencies may approve requests for payment of annual leave from employees who originally chose to retain their balance but then request payment while on Military Leave. (See above for annual leave hours that have been retained as Military Bank leave). See policy 4.50, Military Leave.

Workers’ Compensation After the state-provided supplement ends, and employees have exhausted remaining leave balances, the employee should be placed on LWOP-Workers Compensation. and annual Leave accruals will cease if they have not already ended. See Policy 4.60, Workers’ Compensation for further information.
Other Leave Types With or Without Pay

Employees may choose to retain their maximum allowable accrued annual leave or to be paid in a lump sum when they begin:

  • educational leave with full or partial pay;
  • Leave Without Pay–Layoff; and
  • any other conditional or unconditional leave without pay for a period exceeding 3 calendar months.
Temporary Work Force Reduction Annual leave is retained during periods of Temporary Work Force Reduction (TWFR) and may be used only for scheduled work times during a TWFR (see Policy 1.65). Annual Leave may not be used to restore the employee’s salary to 100%.
When an agency has identified positions that are critical to the agency mission and for which the agency has significant difficulty attracting or retaining qualified employees, the agency may provide certain annual leave benefits as incentives for prospective employees new to state employment to accept state employment or for current employees to continue in their positions. Agencies must receive approval for these actions. See Policy 2.10, Hiring, Policy 3.05, Compensation, and the Human Resource Manual, Appendix I, for a full explanation of how these options may be applied.
Additional Leave An agency may provide up to 30 days (240 hours) of annual leave during a leave year to a new employee as an incentive to accept employment or to a current employee as an inducement to continue with the Commonwealth.
Advanced Availability of Leave An agency may advance up to 30 days (240 hours) of annual leave against future accruals during a leave year to a new employee as an incentive to accept employment or to a current employee as an inducement to continue with the Commonwealth.
Treatment of Incentive Leave under this Policy Leave provided for recruitment and retention purposes is not subject to the carryover limits of this policy but is subject to the payment limits and status change provisions outlined above.
Payment of Annual Leave as an Incentive Agencies may negotiate to pay a specified amount of accrued annual leave as a retention incentive. Employees should be encouraged to retain a balance of leave time for future use. The written agreement with the employee should include details of the payment agreement and any obligations incurred by the employee.
Formal Agreement

When an agency implements one of these annual leave incentives, a formal written agreement must be executed with the employee. This agreement must include, at a minimum:

  • a requirement for satisfactory performance;
  • the required length of employment;
  • an outline of repayment terms if the time and/or perfor­mance requirements are not met.

OAG Approval of Agreement

The agency may include other conditions or requirements as appropriate (see Policy 2.10, Hiring, Policy 3.05, Compensation, and the Human Resource Manual, Appendix I). The Office of the Attorney General should review and approve a prototype of the agreement before it is offered to prospective or current employees.

Agency responsibilities
Leave as Financial Obligation of the State Payment for leave of absence is an expenditure of Commonwealth funds. Therefore, records related to employee leaves of absence are subject to audit by the Auditor of Public Accounts, the State Internal Auditor, and the agency's internal auditor
Annual Leave Records Agencies must maintain accurate and up-to-date leave records in sufficient detail that can be evaluated during an audit by appropriate officials.
Reporting Absences Agencies should record in PMIS paid leave absences, as well as unpaid leaves of absence, that are greater than 14 calendar days. Use PSE003 to record paid leave absences.

The Department of Human Resource Management issues this policy pursuant to the authority provided in Title 2.2 of the Code of Virginia.


The Director of the Department of Human Resource Management is responsible for the official interpretation of this policy, in accordance with section 2.2-1201 of the Code of Virginia.

Questions regarding the application of this policy should be directed to the Department of Human Resource Management’s Agency Human Resource Services.

The Department of Human Resource Management reserves the right to revise or eliminate this policy.

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