Help with sick and vacation leave policy

hulawho

We are changing our vacation policy and implementing a new sick pay policy. Management has decided against a PTO bank.

 We are allowing 3 days of vacation to an employee within their first year of employment (earn 1 day every 90 days). At their 1 year anniversary they receive 10 days of vacation, 15 days at 5 years and 20 days at 10 years. We do not allow carryover of vacation from one year to the next. We pay out any earned but unused vacation hours to an employee when they terminate.

The sick leave policy states that an employee will earn 1 day of sick time after 90 days of continuous employment and then 3 days when they reach their 1 year anniversary, and 3 days each year after. We will allow them to carry over their sick time until they've reached 15 days. We are considering allowing an employee to sell back their unused sick time at the end of each year. However, we do not want to pay them their unused sick leave upon termination.

We pay out the vacation at termination, but we do not want to pay out unused sick days at termination. Are we legally able to do this? Does anybody have any other suggestions on how to implement this policy?

We're a manufacturing company with locations in New Mexico (80 employees) and Texas (68 employees).

I appreciate any comments or suggestions.
Donna

SFbay

You'll have to check your state law.  We are in California and I don't think we could have a policy that makes employees forfeit vacation at the end of each year (but we can have a cap on how many days you accrue before you have to burn one). Has your company always had a policy that prevents employees from carrying over vacation days from one year to the next? What is your company's rational for having no carrying over of vacation days but allowing the carry over of sick days? Any why allow the selling back of sick days but not vacation days?

This is what California says:

Q. My employer's vacation policy provides that if I do not use all of my annual vacation entitlement by the end of the year, that I lose the unused balance. Is this legal?

A. No, such a provision is not legal. In California, vacation pay is another form of wages which vests as it is earned (in this context, "vests" means you are invested or endowed with rights in the wages). Accordingly, a policy that provides for the forfeiture of vacation pay that is not used by a specified date ("use it or lose it") is an illegal policy under California law and will not be recognized by the Labor Commissioner.

 

efeldman

CA I know does not allow use or lose - they must be able to carry over a certain number of days.  You will need to check your specific state laws.  In all other states in which we have employees (NY, OR, NM, UT, MA, MN, FL, MS, VA, MD, NH, NV) any unused vacation days are lost as of Dec 31.  We pay out any unused and accrued vacation to terminated employees.  Sick time does not need to be paid out.

HRforME

Texas does not require payout of unused sick time and for vacation, just requires the employer to follow their company policy.  And it is generous to pay for unused sick time.

We are in Texas and do not allow any carryover, unless it is the employer's fault that the employee could not take a scheduled vacation....for example, the receptionist scheduled 2 days at the end of the year off in 2006.  The company moved the last week of the year and she was required to work the old location.  We allowed her to move those 2 days to January of 2007.