Ask the Experts: Cost of Living, Vacay & Anniversaries

On Aug 13, 2025

Are cost-of-living raises mandatory?

Some state minimum wage adjustments are tied to the consumer price index, but otherwise, cost-of-living raises are not required by state or federal law. You just need to make sure you’re paying any applicable state and municipal minimum wages. That said, if the cost of living has increased in your area, you might want to raise wages (if you can afford it) to stay competitive in the market.

Can we deny an employee’s use of accrued vacation time?

Yes, the decision to approve or deny the use of accrued vacation time is up to you, assuming you do so in a consistent and nondiscriminatory manner. It would be acceptable, for example, to deny a vacation request because approving it would leave you without adequate coverage or because the employee asked with less notice than is required by your time off policy. 

You should, however, ensure certain employees are not denied vacation disproportionately. For instance, if an employer’s administrative staff (who are all women), or their software engineers (who are all men), are consistently denied vacation because arranging coverage is difficult and deadlines are abundant, this could lead to claims of discrimination. 

What are some meaningful ways to celebrate an employee’s work anniversary?

Recognizing a work anniversary is a great opportunity to show how much you appreciate an employee’s commitment to the success of your organization. Here are some options you might consider:

• A personal note of appreciation from their manager
• A video message, digital card, or physical card with messages from their team
• A spotlight in an internal newsletter, intranet post, or all-hands meeting. The spotlight could include listing the employee’s name and tenure or feature recent accomplishments
• Personalized gifts based on the employee’s interests and tenure
• A paid sabbatical after so many years
• A professional development stipend beyond what’s typically available in your organization

Whatever option you choose, consistency is important to avoid anyone feeling excluded or like they’ve been treated unfairly. You can, however, have different practices based on years of employment or type of role. You also can, and should, treat people differently based on their preferences. For instance, if you have an employee who absolutely hates public attention, a splashy call-out in a meeting might be their worst nightmare rather than a welcome form of acknowledgment. Similarly, not everyone will enjoy a case of fine wine or a gift certificate to a bookstore. Using what you know about the employee to customize their recognition will make it that much more meaningful. 

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