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Earned vacation and employment termination qu

Discussion in 'Topical Discussions (In Depth)' started by Rusty Shackelford, Jul 7, 2017.



  1. Rusty Shackelford

    Rusty Shackelford Midas Member Midas Member

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    This issue came up at work with a recent employee who left for another job.

    How is vacation severance to be paid? Our current vacation policy is what you earned in a given year is paid out in the following year. Policy says unused vacation time will be paid at time of separation and earned time will be paid at a pro-rated amount of 1/12th of vacation rate at the last completed month of work.

    The employee had been with us 4 years and is in the 2wks per year schedule. Employee started January 2017 with 2 weeks vacation. He used 1 week. He separated employment on July 1st. Employer paid him the one week of unused vacation that he earned for working in 2016. He worked 6 months of 2017 and was earning time to be used in 2018. The debate is should he be paid 6/12 of his 2 week vacation schedule for completing half the year. I say yes. If you work three days of week and quit before the week is up you still get paid the three days. Vacation is considered to be wages in most every state I could research

    Remember that our policy is you work a year and cannot take that earned time until the following year. Anniversary dates do not matter as it is policy that everyone resets January 1st of a given year.

    Thanks ahead of time.
     
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  2. Usury

    Usury Gold Chaser Platinum Bling

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    IMO, if he quit, then screw 'em. It's vacation/sick pay, not unemployment/welfare pay. I wouldn't be surprised if he timed the vacation he did take just before leaving too.
     
  3. Scorpio

    Scorpio Скорпион Founding Member Board Elder Site Mgr Site Supporter ++

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    It depends on how you classify it IMO,

    If it is a part of wages, then it is payable,

    Whereas if you declare it as part of benefits package, then it is not as it really hasn't been earned until the end of the year. It is a way of rewarding retention.
     
  4. Joe King

    Joe King Gold Member Gold Chaser

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    I was thinking about it like how Scorp put it in his response about benefits, but when I re-read the above part of your post it sounds as though they are supposed to pay partially earned vacation time.
    Why else spell out in the policy that they pay 1/12th pro-rated amount as of last completed Month of work? If earned vacation time isn't yours until Jan 1st, there would never be anything to pro-rate if one quits prior to Jan 1st. It'd either be past Jan 1st or not. The only way it would need to be pro-rated is if someone quit prior to Jan 1st, thereby proving that vacation time is accrued (or earned) on a monthly basis.
    ...and if it is accrued on a monthly basis, they owe him 2 weeks vacation as of July 1st.
     
  5. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    He should be paid for everything owed him (per contract.) A he should receive individual checks for all monies owed:

    - check for wages
    - check(s) for personal / sick time
    - check(s) for each individual week / partial week of vaca time
     
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  6. Rusty Shackelford

    Rusty Shackelford Midas Member Midas Member

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    It is my understanding that vacation is defined as wage.

    They paid him his unused time acrued in 2016 to be used in 2017. The question is do they pay him time earned in 2017 tgat can't be used ill 2018 at a monthly pro-rated method. End of store...they paid the unused time plus the time earned for working 6 months. The debate is how to handle this moving forward as a policy and legal stand point.

    I concur with scorp on the definition. If it being wage or not. The monies are subject to FICA and Medicare taxes so I pretty sure that answers the question. And just like a normal pay week, if you quit after day 3, you will get 3 days pay despite not completing the week.
     
  7. gringott

    gringott Killed then Resurrected Midas Member Site Supporter

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    Just pay the man.
     
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  8. Ensoniq

    Ensoniq Midas Member Midas Member Site Supporter ++

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    Not all states have the same requirements. In NC we don't have to payout unused vacation if we have a written policy explaining forfeiture provisions, but in Califirnia we did and there was a penalty for not paying it in accordance with a schedule

    My question is what has the precedent been? Is this the first person ever to leave the company?

    In my experience with EEOC the state law and precedent are more important than the written policy

    My personal opinion is he should be paid all unused plus the 1/2 year he accrued
     
    Last edited: Jul 8, 2017
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  9. GOLDZILLA

    GOLDZILLA Harvurd Koleej Jeenyus Midas Member

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    It goes by whatever your employment contract or employee handbook states unless you live where there is a law that states otherwise.
     
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  10. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    :beer:
     
  11. ErrosionOfAccord

    ErrosionOfAccord #1 Global Warmer Gold Chaser Site Supporter ++

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    Probably written right in the employ handbook. I've never worked for a large outfit that didn't have this stuff spelled out.
     
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  12. Rusty Shackelford

    Rusty Shackelford Midas Member Midas Member

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    And that's the problem. It is written in handbook, but employer goes "by the book" on a whim,case by case and changes it after something comes up that a new administration does not agree with that was installed under a previous administration but never officially changes it in a formal manner. Whole thing is a cluster fark....always out thinking themselves on stupid stuff when there are bigger issues to focus on
     
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  13. Joe King

    Joe King Gold Member Gold Chaser

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    That's a lawsuit ripe for the picking. If they have a published policy and as long as it is officially considered to be in effect, they must follow it consistently through time and from employee to employee. In fact, not having a policy is better than having one but not following it.
     
  14. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    If the Wage & Hour division of the Dept of Labor were to walk in there and audit the payroll records due to a bunch of complaints the employer wouldn't be doing anything on a whim. Once something is spelled out and written into a contract or employee handbook that should be policy.

    Surprised your legal dept hasn't raised hell over this. Like Joe King said.........."law suit ripe for the picking."
     
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  15. Rusty Shackelford

    Rusty Shackelford Midas Member Midas Member

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    Legal department??? Hahahaha....

    You guy forget I work for a city with 48 employees? Small town people elected with no experience needed. I try and point out that this could be problematic but many consider this to be causing rocking the boat and frown on trying to correct potential issues.

    They have a clause in the "book" that I think they think protects them. It is verbiage that says any clause spelled out can be changed at any time with out notice. Not sure that would ever fly if pressed into an argument and a 3rd party arbiter was called in.
     
    Last edited: Jul 8, 2017
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  16. Usury

    Usury Gold Chaser Platinum Bling

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    LOL!!!
     
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  17. Usury

    Usury Gold Chaser Platinum Bling

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    If he only completed work through June, then that's just half the year, so only 1 week. Not sure how you get 2.
     
  18. Joe King

    Joe King Gold Member Gold Chaser

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    Per the OP, he started the year with two weeks, used one and accrued half of his yearly vacation time by working 6 full months. Enter the year with 2 weeks owed - 1 week used + 1 week accrued = 2 weeks owed when leaving his position on July 1st.
    Edited to add: double check my math though, I've been wrong before. lol
     
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  19. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Worked for a large construction company (lotta peeps - mostly union.) When anyone left (retired, quit for personal reasons or laid off in slow times) this is exactly how they were paid off. Know several companies in the same business who paid off the same way. Just the normal way of doing business to me.

    Never knew any union employee who was fired so I have no clue how that was handled. Probably the same.

    Edit: You also signed a statement that you received the checks and what the checks were for. No big deal. Covered both the company and the employee.
     
    Last edited: Jul 8, 2017
  20. GOLDBRIX

    GOLDBRIX God,Donald Trump,most in GIM2 I Trust. OTHERS-meh Site Supporter Platinum Bling

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    Having been on both sides of the table I say management / City jumped the gun. That earned money for 2018 could have been paid out after December 31, 2017.
    But I can also see 'Cleaning' him off the books and not dragging paperwork for the next six months. Especially if the city's Fiscal Year is NOT Jan. 1st of each year. ( Usually September for .govs)
     
  21. ttazzman

    ttazzman Midas Member Midas Member Site Supporter

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    i really dont see the debate ....as i read the policy you stated ...he is owed one week he was due earned the previous year......and another week for the 6/12ths ...........this policy seems clear cut......one thing missing in the policy statement as provided was if it is based on a calendar year or employment anniversary.....but that i assume was taken into account

    that all being said....i learned from years of having employees that its cheaper in the long run to send them away happy ....vs the vindictive alternative...

    one more thing........even if you do everything right policy wise its still 50/50 the wife shows up rasing hell at the accounting office LOL
     
    Last edited: Jul 8, 2017
  22. Rusty Shackelford

    Rusty Shackelford Midas Member Midas Member

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    Don't get me started on the aniversary date.....that's another problem in and of itself. The anniversary date only applies for the first year of service. After that everyone resets to January 1st of a given year. Book doesn't spell it out that way, but that is one of the whims that instituted and ignored what was written.
     
  23. Joe King

    Joe King Gold Member Gold Chaser

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    Given practices like you've described, even a mediocre lawyer would make mincemeat of 'em.
     
  24. searcher

    searcher Mother Lode Found Site Supporter ++ Mother Lode

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    Sounds like you may have some neat stories. Can't speak for any one else but I wouldn't mind hearing them.
     
  25. ttazzman

    ttazzman Midas Member Midas Member Site Supporter

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    the construction company was the worst....you can just imagine wife's with a pack of kids waiting in the company parking lot for checks to be done ......we had to do away with friday paychecks due to guys taking checks and partying before going home sometimes with company vehicles, clothing etc...getting calls from wifes looking for husbands on Saturday or Sunday that never made it home...in 70s n 80s put accting office in a strip center with a bar in it and bought into the bar that way we knew where to send the wifes and we could find the guys ...seen wifes beat the hell outa guys on payday....banning them didnt work...they would line up on the street...finally best answer was making wend payday and dispersing a runner to each jobsite with checks in the morning and hiring the meanest woman you could find to be point person in accounting .....god forbid you make a error on a paycheck...or a wife have trouble using health insurance...

    LOL..did i tell you i retired early ... :)
     
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  26. Treasure Searcher

    Treasure Searcher Gold Chaser Platinum Bling

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    When I worked construction in the 1990's, most guys were divorced. When the paychecks were issued, the child support was already deducted. Construction company was required by the state to withhold child support and send the amount directly to the state.

    Worked at a union job that paid weekly. Good wage and benefits. Once a month, a coworker had his child support for two children was taken out of a weekly paycheck. Gets a paycheck for the previous week's wages and after the monthly child support was taken out, he had a check with a whopping $9.00.
     
  27. Usury

    Usury Gold Chaser Platinum Bling

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    Ok that makes sense if that's how it is. I guess I got the impression from Rusty's post that they already paid the prior year unused vacation, and yours was focusing on monthly accrual for current year. So you see I thought you was using some crazy newfangled common core math or some such nonsense.
     
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