Employer Wants to Reimburse Vacation Based on Old Pay Rate
Q The company I work for has had a policy for years of granting employees from two to five weeks of vacation annually, depending on length of service. They have never required anybody to take the vacation within a certain time. As a result, many of the older employees have accumulated hundreds of hours of unused vacation time, which are shown on their paycheck stubs.
In preparing an employee manual, the company has now decided to change its policy and require employees to use their annual vacation within a certain time or lose it. The company also says it will buy out previously accumulated vacation time at a fraction of the cost.
Can the company legally do this, or is it bound to reimburse employees at the equivalent of their current rates of pay? These are salaried employees, not hourly workers, and they do not belong to a union.
--W.M., Huntington Beach
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A Employers are not entitled to implement use-it-or-lose-it policies regarding accrued vacation. Thus, if an employer permits employees to carry forward unused vacation, an employer cannot compel an employee to forfeit vacation time that he or she has earned.
An employer can, however, limit the amount of vacation time that can be accrued and then reimburse the employee for those days not used by the employee.
Further, an employer cannot discount the value of earned vacation pay. It appears your employer is claiming that because some of the vacation was earned several years ago, it need only pay the equivalent of its value at the time earned. For example, if you were paid $500 a week five years ago and now earn $1,000 a week, the employer is arguing that the earned vacation should be paid today at the $500 rate.
This is a novel argument that, quite frankly, will not prevail given that it does not account for interest, loyalty and hardship on the employee for deferring vacation. The courts and the California Labor Commissioner have routinely held that vacation pay is to be paid at the time it is taken.
I suggest filing a claim with the Labor Commissioner’s office.
--William H. Hackel III
Employment law attorney
San Clemente
A Question of What’s Fair QI have worked at the same company for seven years, and for the last two years I’ve traveled for it. For 15 months I was on the road at least 400 days, expected to work at least six days a week and 12 hours a day.
After a number of attempts to get out of my position and into a stable working environment, I was told I am not really “company material” but that if I keep up the good work maybe in six to nine months I could prove myself.
I was on the brink of suicide when I was given some vacation time and then placed under a doctor’s care. After three months, the doctor has released me back to work as long as I don’t travel.
The company wrote a letter stating that since I can no longer do the job it hired me for, it is refilling my position on a permanent basis and has no job for me. It is talking about a termination severance package.
Is this right?
--W.M., Palm Springs
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A The key to asserting any employee rights is understanding the hidden reasons behind unfair acts of the employer. On the surface, it appears your company simply does not have a position open for you after you unilaterally took extended leave.
Since the company challenged you to “keep up the good work” to prove yourself as “company material,” evaluate your work performance. Has it been good enough over an extended period of time to justify your asking for another position in the company? If there is another position open, compare your qualifications with those of whoever gets the job.
There are state and federal laws that require an employer to return an employee to his or her same job after a medical leave of up to 12 weeks. In your situation, it is not clear whether your leave, in addition to your vacation time, exceeded 12 weeks.
Even if it did not, your previous job is no longer available, and your employer claims no other jobs are available either. Ask some of your friends to determine whether that is true.
Your employer might have an obligation to “reasonably accommodate” you in another position. If your medical condition was, in fact, caused by work and qualifies under the workers’ compensation laws, your employer has additional responsibilities to put you back to work, even if in another position.
Evaluate the termination severance package. Try to negotiate one with higher payments to you. See an attorney.
In retrospect, getting a fair severance, leaving the company and starting over with other employment might be the best thing for you. Despite its potential unfairness, it is certainly better than enduring continued stress.
--Don D. Sessions
Employee rights attorney
Mission Viejo
Most-Asked Questions Times on Demand has prepared three pamphlets based on the Shop Talk column. They are answers to readers’ most-asked questions on overtime; unemployment insurance, terminations and medical leave; and job benefits. To order, call (800) 788-8804. Each pamphlet costs $5.41, plus 50 cents delivery. Please allow two to three weeks for mail delivery.
