Workers on Leave May Be Denied Severance

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Q: It has been announced that my factory will be closing. As the final shut-down date approaches, more and more jobs are being eliminated after employees receive the proper 60-day notice. Employees also have been granted severance pay.

However, management has stated that any employee on medical leave at the time his or her job is eliminated will not receive severance.

Is it legal for the company to deny severance to someone on leave for maternity, minor surgery or some other legitimate reason?


--R.A., Anaheim

A: Yes, it is legal to do so. An employer may legitimately decide that severance pay will be given only to those employees who are actively on the payroll and working at the time of their separation. However, the employer must clearly state that in its policy.

If you have questions, you should carefully review your employer’s severance pay plan.

--Michael A. Hood

Employment law attorney

Paul, Hastings, Janofsky

& Walker

Nonunion Workers Not Protected for Tardiness

Q: Is there a state or federal law regarding a grace period for arriving late to work?

--C.G., Pasadena

A: Employers, like parking services, are not legally required to provide grace periods.

In fact, employees can be fired or otherwise disciplined for a single instance of tardiness, unless the union contract or an employment agreement limits the employer’s disciplinary power in these circumstances.

--Joseph L. Paller Jr.

Union, employee attorney

Gilbert & Sackman

Employer Is Required to Pay Out Benefits Amount

Q: Last year, my husband’s company forced all employees to take medical, dental, life insurance and a retirement plan. The employer withheld more than $500 a month for these costs, contributing nothing.

Recently, the employer closed shop without warning. Employees lost two weeks’ pay, as well as accrued vacation time and the last quarter of their retirement deposits that had been withheld from paychecks but were never disbursed to the company that held the retirement plans.

Now the company that maintains the retirement funds refuses to disburse the $20,000 that had been withheld.

We want to roll the funds into another plan rather than keep them at some company that doesn’t give us monthly or quarterly statements.


What can we do to get this money released to us? We know that the letter of the law states that the company can keep the money until my husband is 65, but due to the circumstances, can’t something be done?

--K.F., Burbank

A: An employer has specific deadlines for forwarding employee contributions to the plan, and holding those amounts for a full quarter violates those rules.

Furthermore, it is odd, to say the least, for a company holding the retirement plan assets to refuse to pay the amount of the benefits to terminated employees in these circumstances.

You might want to consider seeking the assistance of the Department of Labor on these matters. Its local office is in Pasadena.

--Kirk F. Maldonado

Employee benefits attorney

Brobeck, Phleger & Harrison

Accrued Vacation Must Be Paid on Termination

Q: My wife works for a company that awards vacation and sick pay at the beginning of the calendar year. She has been informed that if she left her company in the middle of the year, she would not be paid for the accrued vacation and sick pay.

The company I work for, on the other hand, pays partial accrued vacation and sick pay at the time of termination.


What does the law say?

--L.L., Chino Hills

A: Employers must pay for all accrued vacation. If the company promised you a two-week vacation at the end of one year, you would be entitled to a week’s vacation pay if you were terminated at six months. To avoid that obligation, the company would have to use precise language that gives no hint of “accrual” or “vesting” promises.

Sick pay is normally not accrued and is lost upon termination. However, if the employer defines sick leave as vacation leave, it would be bound by the same rules that apply to vacation pay.

--Don D. Sessions

Employee rights attorney

Mission Viejo


If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626; dictate it to (714) 966-7873, or e-mail it to Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice. Recent Shop Talk columns are available at