Paying out accrued sick and vacation time after demotion

drehil

[font size="1" color="#FF0000"]LAST EDITED ON 02-27-07 AT 07:44AM (CST)[/font][br][br]We just demoted an employee (my first experience with a demotion) and that employee had a question I can't answer without researching. So I am looking for your help. The ee questioned the rate of pay that would be paid out for the accrued sick and vacation time the ee has. The ee accrued the time while working at the higher position and rate of pay, but will be using it at the lower position and rate of pay. What pay rate should this vacation and sick time be paid at if she uses it from this point forward, the old rate or the new rate of pay? Is there a law that would govern this? I could be wrong but I would say the new rate of pay but have nothing to back that decision. Thanks in advance.

HR In NH

I'm not aware of any federal or state law that would address this issue. I apply the prevailing rate of pay at the time the employees uses or is paid out for these benefits.

Dutch2

Same here. Have always paid out at their current rate of pay. Same could hold true if somone was promoted to a higher rate of pay. Would you consider paying their sick, vacation, at the lower rate they were making when they "earned" these beenfits?
Good luck.

marc

This cannot be an issue as long as the person is an EE. You are granting time off - they earned X hours of time and you will give them X hours of time.

Upon termination, we pay out unused vacation pay at whatever rate of pay they had at that time. It does not matter if it was higher or lower than when they earned the time.

I look at it as though they are earning time off, not dollars.

Make sense?

jmcaa

Explain to the employee that IF they receive a raise each year then the vacation time and/or sick leave they use AFTER that raise is at the current pay rate, therefore the same would apply whether the EE's rate goes up OR down for when the time is actually taken.

They are earning Leave HOURS not a set rate of pay.

lnelson

[font size="1" color="#FF0000"]LAST EDITED ON 03-01-07 AT 11:29AM (CST)[/font][br][br]It would be at his current rate of pay.