Just acquired...Have to apply at new company????

Our company just got acquired by one of the big players in the industry and while they are promising to keep all employees, they are requiring all employees to complete a new application and conduct background checks again.

  1. Is this the best way to do it?
  2. If so, all unused vacations would have to be paid out, correct?
  3. any other issues that we should consider?


  • 4 Comments sorted by Votes Date Added
  • How things are handled will depend heavily on the acquisition terms.  If they are looking at it as though your firm ends and everyone is terminated and then rehired, then I would say yes, everyone will need to complete all new paperwork.  Your legal department can give you the specifics on this. 

    We just did a very small acquisition, and we had everyone at the new firm complete all new information, but this was because they did not have the information that we require to be in their employee files.  If your legal department says this isn't being considered a termination and rehire, then you might want to look at the forms the new firm is using to see if your old forms have the same information on them.  If so, you may be able to talk the new firm into using what you already have.  If not, then everyone will need to complete all new forms.  Personally, I would recommend all new background checks.  It's always interesting to see what your employees aren't telling you....  As for vacation, again it depends on the terms of the acquisition and your old vacation policy.  I'd check with your legal department for clarification.

    Remember, the new firm is looking at this from a compliance aspect, and sometimes it's just easier to have everyone complete new forms than have to sift through files to see if the old company has what you need. 

    The last thing I would recommend is keeping employees in the loop as to what is going on.  If the employees feel they don't know what's happening, they'll start jumping ship faster than you can imagine.

     Good luck!

  • I have been involved in 2 different acquisitions both large companies, after reviewing the new employees personnel files we had all the information needed for payroll etc.

    Regarding unused vacation, most companies will allow employees to keep and use what they have earned from the "old" company and then would have to follow the new companies vacation policies. Also, you might want to check the state laws regarding unused vacation, in some states if it is earned an employee must be paid for it.

     Background checks are a good idea, you never know what an employee has done since being employed.

  • I agree that it's a good idea to have the employees of the acquired company fill out applications and go through any background checks that the company typically requires of new hires for the positions. With regard to vacation, you can handle this any number of ways. One way is to allow them to carry over the bank of vacation from the old company, but require it be used by a certain date. Alot depends on the state and whether there are laws regulating accrued but unused vacation time.


  • I actually work for a company that has acquired several locations over the last couple of years.  The big key is to stay in communication with the employees so they don't think they're all being fired--and don't make promises you can't live up to--if you don't know how something will transition don't be afraid to say "I have to look into that and will get back to". 

    Anyways, we do require all employees to complete new applications, background check,  drug screen, and all employment policy sign-offs.  Our reasoning is we don't know what the last company did and to what extent.  Plus, the employee files don't technically belong to us--they remain with the previous owner.  And you have to account for differences in policies that you want your new employees to not be surprised about (ie, you allow people to smoke on campus, the new company is totally smoke free).

    And as for vacation--as stated before, that depends on the agreement.  We've done both--in some instances the previous owner paid out the unused vacation so they started from day one with us.  In other cases, we've gotten a "credit" from the previous owners and the people continued to take their vacation and earn vacation time as if nothing happened.

    Other issues to look into--when will the new health insurance plan take effect?  Day one of the official acquisition or will the employees have to wait for the waiting period with the new company?  And what about the 401k plan?  Are employees able to contribute to that day one or do they have to wait the waiting period to join that as well?


Sign In or Register to comment.