Pa Employer With Not Handbook Or Written Pto Policy

[Egon]

My daughter has given her 2 weeks notice to leave her job.  They are a very small PA pharmaceutical research company with about 10 employees.  They have begun to put together a company handbook and set PTO guidelines but this was suppose to be sent to their attorney for legal review before it is distributed to the employees and implemented.  This has not yet been done.  Her supervisor(the CEO)is now insisting she sign off on a statement that she has taken more than the allowed PTO time and the time will be deducted from her final paycheck.  Is this legal when there are no HR policies in place?

[Hinrik]

Lorri,

Here is a typical paradox that could easily have been avoided.   In Pennsylvania, there's no law that requires an employer to have an employee manual.  Obviously, it makes common sense for an employer to do so.   There are many compliance mandates and other BASIC rules that would fit comfortably into an employee manual and it would be the best route to deliver the information.    Plus- it is the FIRST  thing an attorney will ask for when things go South. I see at least three problems here.

1-  With or without an employee manual, the CEO could ask her to sign the paper to pay back the overused PTO.  After all,  she did use more than she earned, right ?    So, it would be the right and ethical thing to do regardless of the law.  She used more than she earned.  period.    If she agreed to pay it back,  then the company is happy- and she settles up with the employer.

But what is she disagreed to pay back the unearned PTO?

2-  In Pennsylvania,  wage reduction agreements must be signed upon hire or upon the onset of a new policy or rule requiring a reduction of pay down to the level not to exceed minimum wage.   A wage reduction agreement imposed "after the fact" by the CEO would not be supported by PA law.

3-  The employee could say she believed the PTO was "given" to her as a form of compensation and it is not something she ever expected to pay back.   Did she really think this ?    However, the law- and attorneys will side with your daughter for two reasons on this approach. Here's why...  Reason #2 above  and this employer is getting into trouble with Pennsylvania wage payment laws.   Here the employer failed to formalize their policy in regard to what happens when employees resign and have remaining PTO.  If the employee strongly believes they earned that PTO and the company never intended to ask for it back, then an attorney would typically side with the employee and the company would pay.  For argument's sake,  assume there was NO PTO policy and the company just paid the employee anyway for days she took off,  then asked for the money back later.   Same difference.  To the employee, what she was paid for time NOT worked was in her opinion considered as compensation. The fact the PTO was paid in excess of the unwritten policy shows again the employer intended to give the paid PTO without any recourse- as they had NO POLICY to address what other circumstances would come up.    

For the employer, this all could easily have been addressed proactively by getting their manual in place and by correctly using payroll reduction agreements.          

Sincerely, Brian Phillips

HR Consultanthttp://www.harvis.org