Can my co-worker collect vacation pay?

He can request it be paid out, but he cannot demand it. It is up to the employer to decide whether they want to pay it out. He's better off just taking the last 2 days before he loses them.

Also the state you work in may change this answer

Pay the worker for the two days he GAVE you, as he didn't use them and instead worked. He could have used the days but instead he came to work to do your bidding. You could be a Scrooge and keep the money and justify it by quoting some twist on a rule in your book, or you could do the right thing and give him the money he earned twice, once as part of his benefits package you agreed on when you hired him, and again by not using the vacation days. While you're at it, for even THINKING of NOT giving him his pay, throw in a bonus!