Vacation Payout - Inconsistent Policy

[Grenville]

The employment handbook says "Employer may pay out accrued vacation at termination".  

Given this verbiage, can an employer pick and choose to whom accrued but unused vacation is paid at termination? This employer has had a history of paying out accrued vacation at termination without discrimination as to title or seniority.  In this instance however, the employer appears to be making an exception based on the new employer of the employee.  

Employer is located in Michigan.

ANSWER: The word of the day here is "may". This means that the employer may approve or deny payment of accrued vacation upon termiantion at his discretion. Most employers will not pay out vacation if the termination is involuntary with cause(such as a violation of policy) or if the employee leaves within the first 90 days of employment. Additionally, a lot of employers will not pay out accrued vacation if the employee fails to give proper notice(usually at least two weeks) before voluntary termination. Without the details of your particular case, there are quite a few reasons that the employer may have decided to forego paying our the accrued vacation.

Shannon M. Reising, MSP, PHR ---------- FOLLOW-UP ----------

Happy to follow up with some details.

I was employed for 17 years and gave 2 weeks notice.  I left to go to a competitor.  There was no "cause" involved - simply a better opportunity for more pay.  There is some spite on the part of the former employer simply because I left for a competitor.  

The last 4 employees to leave voluntarily all received full vacation pay-outs.  They left for non-competitor type companies.  

I've thought about using the DOL in this case to collect.  

Any additional comments would be appreciated.

ANSWER: With the information you provided, it seems that you may have a case for inappropriate policy implementation, especially as this has monetary involvement. However, I would advise that you weigh the propensity of having to go to court and the costs(and stress) associated with these activities versus the amount the company would owe you(minus taxes). If you find out there is a possibility you could come out in the "red", I would evaluate whether doing so is really to your benefit.

Shannon M. Reising, MSP, PHR

---------- FOLLOW-UP ----------

Can you give a little more information about "inappropriate policy implementation"?  I take it that this has to do with their inconsistency in application of the policy...

Also - by filing a complaint with the DOL in Michigan, I believe elect to remove the possibility of going to court with a Civil complaint.  I am carefully weighing my options, including the long term implications associated with filing a complaint.  Its unfortunate that big companies show a lack of integrity and take advantage of these situations knowing that most employees don't have the umph to follow through.  The cost is about $1,000 - not big $ to them, but enough to make an impact for me.

Thank you for your help.

[Jedediah]

Company policies, such as vacation accrual pay-outs, that directly affect employees'(or ex-employees'# pay must be applied equitably across the organization. If an employer makes a precedent, such as offering a pay-out to all employees who submit appropriate notice #2 weeks in your case#, then the employer must apply this precedent to everyone. However, if the policy states that the employer may use its own discretion, there is a cause for defense, although the employer, if taken to court, will have the burden of proving it. If you can prove that the employer set a precedent and broke that precedent in your individual circumstance, the court may side with you.

As far as the money is concerned, I agree that $1000 is a lot of money. Understand, however, that this $1000 may be severely reduced with the cost of attaining legal counsel #I would not advise self-representation to save money with the possibility of going up against the company's retained legal firm#, court costs, and taxes. Even in the view of making a point, also note that the case will, unfortunately, probably not be publicized enough to make the company issue a permanent change for future similar employee situations. Also please carefully consider any negative perceptions that may arise with your current employment status from taking the company to court. Management at your new company may be wary and become fearful that you may do the same to them, even though such may not be your intent.

Shannon M. Reising, MSP, PHR

[Mardel]

The employment handbook says "Employer may pay out accrued vacation at termination".  

Given this verbiage, can an employer pick and choose to whom accrued but unused vacation is paid at termination? This employer has had a history of paying out accrued vacation at termination without discrimination as to title or seniority.  In this instance however, the employer appears to be making an exception based on the new employer of the employee.  

Employer is located in Michigan.

ANSWER: The word of the day here is "may". This means that the employer may approve or deny payment of accrued vacation upon termiantion at his discretion. Most employers will not pay out vacation if the termination is involuntary with cause(such as a violation of policy) or if the employee leaves within the first 90 days of employment. Additionally, a lot of employers will not pay out accrued vacation if the employee fails to give proper notice(usually at least two weeks) before voluntary termination. Without the details of your particular case, there are quite a few reasons that the employer may have decided to forego paying our the accrued vacation.

Shannon M. Reising, MSP, PHR ---------- FOLLOW-UP ----------

Happy to follow up with some details.

I was employed for 17 years and gave 2 weeks notice.  I left to go to a competitor.  There was no "cause" involved - simply a better opportunity for more pay.  There is some spite on the part of the former employer simply because I left for a competitor.  

The last 4 employees to leave voluntarily all received full vacation pay-outs.  They left for non-competitor type companies.  

I've thought about using the DOL in this case to collect.  

Any additional comments would be appreciated.

ANSWER: With the information you provided, it seems that you may have a case for inappropriate policy implementation, especially as this has monetary involvement. However, I would advise that you weigh the propensity of having to go to court and the costs(and stress) associated with these activities versus the amount the company would owe you(minus taxes). If you find out there is a possibility you could come out in the "red", I would evaluate whether doing so is really to your benefit.

Shannon M. Reising, MSP, PHR

---------- FOLLOW-UP ----------

Can you give a little more information about "inappropriate policy implementation"?  I take it that this has to do with their inconsistency in application of the policy...

Also - by filing a complaint with the DOL in Michigan, I believe elect to remove the possibility of going to court with a Civil complaint.  I am carefully weighing my options, including the long term implications associated with filing a complaint.  Its unfortunate that big companies show a lack of integrity and take advantage of these situations knowing that most employees don't have the umph to follow through.  The cost is about $1,000 - not big $ to them, but enough to make an impact for me.

Thank you for your help.