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Last Pay Check

NACCAS_VANACCAS_VA 9 Posts
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CEO, in accordance with contract, gives 60-day notice. Board accepts CEO's resignation, but tells him he doesn't have to come into the office any more.

As allowed by the contract, CEO has accumulated 60 days of leave. Can the accumulated leave be used to cover the 60 days CEO doesn't have to come into the office? OR, does the organization have to pay CEO salary for 60 days plus salary-equivalent for the 60 days accumulated leave?

The answer is not found in the contract. I think the accumulated leave can be used to cover the 60 days the CEO is still employed but doesn't have to come into the office.
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Comments

  • 8 Comments sorted by Votes Date Added
  • ShadowfaxShadowfax 910 Posts
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    His contract calls for 60 days notice, he gives it, and you want to stiff him for the 60 days because you decide he doesn't need to come in and the only reason you can do that is because he complied with the contract? Pay him the 60 plus the accumulated.
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  • AJ SPHRAJ SPHR 319 Posts
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    I agree with the above poster - this would be similar to someone giving a two weeks' notice and the employer deciding they didn't want them to work their notice. In those situations, most employers pay the two weeks' pay in lieu of notice. I would pay the 60 days AND the 60 days leave the CEO is still entitled to.
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  • NancyJNancyJ 37 Posts
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    The important issue here is not the 60 days of accumulated leave - if the contract is silent on this point you must pay him, as this amounts to deferred compensation.

    However, how does the contract specifically address the 60-day period the CEO gave notice for? The contract would have to specifically address compensation for this period. Should a regular employee give two-weeks notice and you decide that you don't want them working for the two weeks (for whatever reason) you aren't compelled to either keep them on site or pay them for those two weeks. The same applies here - if the contract does not have a stipulation for compensation for this period, then it would appear that he does not have to be paid.

    Then again, if it does, you owe him 120 days pay.


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  • RockieRockie 2,136 Posts
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    Generally, in a case like this, a CEO would be given a "severance package" if you didn't want them to remain on the premises.

    In your case, since he gave the proper notice required and you, as the employer, elected not to have him on premises, I would pay him out his notice and also give him his accumulated leave.
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  • ShadowfaxShadowfax 910 Posts
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    How does the 60 days of 'accumulated leave' get to be 'deferred compensation?' I agreed right off it should be paid, but, at least in Mi I wouldn't be so quick to say it 'must' e paid or that it is deferred comp. Does not Fl recognize the difference between accrued and earned? Would 60 days of unused vacation be deferred com w/o regard to the langualge of the policy under which it was accumulated and unused?
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  • NancyJNancyJ 37 Posts
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    The original post does not mention whether this time is earned or accrued, only that it is "accumulated", which means it is available for use and is by default "deferred" until such time.

    The contract must specifically address this issue.

    Unfortunately, I say this from personal experience. A few years ago we lost a protracted battle with an employee because we did not specifically outline under what conditions the time off would be paid/not paid. And as we did not the court determined it was akin to deferred compensation and that a "reasonable person" would consider it part of their compensation.


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  • Don DDon D 9,834 Posts
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    The CEO was asleep at the wheel when he signed this contract. The employer, on one hand, requires two months of notice in order for the contract to be broken by the employee. On the other hand, the company, once notice is given, will screw the employee and try to weasel out of paying him during the period of notice he was required to give. If the employer has no intention of honoring a period of notice, why would it require one? I agree he is entitled to his accumulated leave plus 60 days pay. And he should be allowed to keep his desk name plate too.
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  • E WartE Wart 719 Posts
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    I call this pay in lieu of notice. You should pay him for the notice time (you are the ones who told him not to come in to work). Then if it is your policy to pay unused leave time (and it is the state law) you have to pay him this, normally in a lump sum at the time of leaving.
    I don't understand what the question is?
    E Wart
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