Accrued Paid Days Off

donicek

Are any of you aware that it is unacceptable to not pay a Paid Days Off balance when a person leaves the company? We tell them it is accrued, not earned, and is for their use while employed. Our PDO policy says any time away from work is paid out of this account -- holiday, vacation, sick, bereavement.

System

That may not be entirely true. Vacation time is time that belongs to the employee. Sick time, Jury Pay, Funeral, etc. is 'income protection' and not paid time off owed to the employee. When you combine it all into one batch and call it PTO or PDO, I believe you can make policy that does not create that kind of liability when an employee departs. I'd like to hear how others handle PTO when an employee leaves.

HRockets

Our policy allows us to pay for unused vacation leave upon separation. Employees terminating during the first 12 consecutive months will not be paid for accumulated vacation leave. Upon leaving employment with the city we do not pay sick leave, etc.

Geno

donieck,

An employer's obligation to pay (or not pay) accrued leaves at departure is typically governed by the state law. I had a chart (which I can't put my hands on this morning that gave a brief overview of each state’s regulations). Predictably, they run the gamut of must always, need never and maybe.

In Maryland at least, a lot depends on the wording of your policies. If you have a written policy restricting payout of accrued leaves, whether it is based upon when you leave during the course of the year, or the circumstances under which you leave, the employer is within its rights to pay out only a portion of accrued leave days, or none at all, if it so desires. If your policy clearly states that employees who are terminated for cause will not be paid out accrued leave, or if your policy sets forth a pro rata payout or some other method based upon when the employee leaves during the year, the employer is acting within its legal right to restrict accrued leave payouts.

Other states have regulations that view accrued leaves in the same way they view earned wages and do not allow for employer discretion in the matter.

Now, let’s see if I can find that darn chart.

Geno

marc

Geno is right, this is driven first by State laws, then by your own policy. You can always do more than your state law says, just never less. In Nevada, you do not have to pay out accrued vacation, unless it is your policy to do so. What you do for one, do for all.

ScorpioHR

How timely for me that this thread is out there now! Our COO has put a policy in place that if you do not give a minimum of 2 weeks notice when you resign then, no vacation time is paid out, period. Furthermore, if they have used more time then they have accrued when they resign without the 2 weeks notice, they have to pay it back. From what I am reading here, this is illegal in Florida? I could not find anything that said that in our State employment laws. Please, educate me!! Thanks
scorpio

crawfod

Scorpio and others, if you do a google search entitled "vacation pay in (your state)" a number of sites come up. Most say as has been stated above, that it depends on state law and the employer's policy. In Florida, it looks to me like your COO's policy is legal.

But is it advisable and ultimately beneficial to your company? Employees are famous for figuring out how to beat the system, and they will figure out how to beat yours too.

On another point, why would your company allow employees to ever use more time than they have accrued? This seems like a bad policy to me.

HRinFL

Scorpio:

Our ees accrue a certain number of hours per month for vacation, STD, etc. They can use this time before it is accrued. The way our system works, if an ee has one week of vacation, they "earn" it at the end of June. Two weeks, one is earned the end of June, the second, the end of December. The more weeks you have, the earlier they are "earned." We also give ees a Holiday Bonus that is "earned" on December 31. We pay this out the second week of December, with the expectation that the ee will work through the end of the year.

In both scenarios, if the ee is discharged or resigns prior to earning vacation time/Holiday Bonus, they are responsible for paying that which was used and not earned back. We bill the ee, but realistically, hardly ever receive payment for this. We do not garnish wages, and it is usually not worth the expense of pursuing through legal channels. So, you can do it, but don't expect ees to bring out the checkbook and pay back what is owed. We do not have any issues with those ees that resign, they know when they earn their benefits and wait until after the date they are entitled to receive the benefit before they resign.