Make clear in handbook whether or not vacation pay survives termination — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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Make clear in handbook whether or not vacation pay survives termination

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in Compensation and Benefits,Human Resources

Don’t leave questions about compensation or benefits up to interpretation by the employee—or the court.

Employers that want to limit payouts for accrued vacation pay on discharge should make it clear that this will happen. Include the limitation in the employee handbook and make sure employees know the limitation is there by getting their acknowledgment that they read and understood the handbook.

Recent case: Karidis was hired to turn around patient satisfaction scores at a hospital. She didn’t succeed and was terminated before having used up her vacation allotment for the year. She sued, alleging she should have been paid for the accrued vacation time when terminated (among other claims).

The court said New York state law doesn’t require the payout as long as the employer lets employees know up front that discharge means losing the accrued vacation leave. Since Karidis had read the handbook that contained the limitation, she had agreed to the terms and was not entitled to the payout. (Tubo v. Orange Regional, No. 13-CV-1495, SD NY, 2015)

Final note: Also at issue in this discrimination claim was whether Karidis was qualified for her job. That’s a prerequisite she had to show before moving forward with a discrimination case.

Because her employer told her it was keeping her on long enough to train her replacement, it couldn’t claim she was “unqualified.” Keep that in mind if you think the employee being replaced will sue for discrimination.

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