Unpaid vacation and accrual

debib

We are going through financial difficulty at this time and are probably going to have to lay off additional employees. We are thinking of asking these employees to take a month of unpaid leave in lieu of laying them off right now. Hopefully, in the meantime, we will receive some money.

If they do agree to take the unpaid leave, do they accrue vacation time during that month? Would we ever be liable for the month of pay they did not receive?

Thank you.

cebudragonlady

Going one step further, suppose an employee already on "unpaid leave"
quits ? Then the company would HAVE to pay earned and accrued vacation
up to at least the last day they worked, and pay within 48 hours of the
employee quitting.

Margaret Morford

You clearly have some issues and I would recommend that you get some legal advice on this before you do it. I'd pay employees for their vacation if they asked for so they could make ends meet during their leave. You're going to have to pay it anyway somewhere down the road. It should have already been accrued for. Also, some of your people may argue that they have really experienced a short lay-off and be eligible for unemployment. Also depending on how big you are, you may come under WARN if you are not sure you're going to be employing them after the month of leave. This is why I think you need some legal advice.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Carol CA

What do your policies say? Do other people on LOA's generally accrue vacation?

You might also check with the EDD. We were very slow and went to partial work weeks before deciding to do a RIF last year. You can coordinate with the EDD to pay partial unemployment benefits. It helps both the company and employees limp along until you make a final decision.

JudyRoy

At our non-profit no one accrues vacation while on unpaid leave. They are required, however, to take all paid leave before taking any unpaid leave. Hence, you would be paying their vacation pay (if they had any) while they were off. If layoffs seem inevitable, why not just go ahead and do it.