Now's a good time to carefully review your policy on whether employees receive pay for unused vacation time when they depart your organization.
Pay special attention to describing whether your policy applies to all cases of separation (i.e., firing, resignation, layoff) or just certain situations.
As a recent case shows, if your vacation-pay policy appears ambiguous, courts will likely interpret it in favor of employees.
Recent case: When EDS fired Robert Hutchins, the company refused to pay him for his four weeks' worth of unused vacation time. It cited a written Q&A policy that read: "What if I leave EDS? Can I get paid for any unused vacation?" The policy's answer: "If you leave the company, you do not receive vacation pay for unused vacation time."
At issue: What did the phrase "leave the company" mean?
Hutchins filed a lawsuit, saying employees believed that "leave" only referred to voluntary resignations, so he should be paid for unused vacation time.
The company countered, argued that "leave the company" referred to any type of separation (firing or resignation), so the policy should block any payment of unused vacation time.
Result? The court sided with Hutchins, saying that because the policy was too vague on who should be paid for unused vacation time, the employee must win. (Electronic Data Systems Corp. v. Attorney General, No. SJC-08927, Mass. Sup. Jud. Ct., 2003)
Like what you've read? ...Republish it and share great business tips!
Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...
We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.
The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.
" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/5764/clarify-your-vacation-policy-or-cough-up-extra-pay "
- Employee handbooks: Craft with care to secure 'at-will' policy
- Was that insubordination, or an accommodations request?
- Former Freeport fire chief sounds the retaliation alarm
- Public employer? Beware retaliation against employee who testifies in civil rights case
- 6th Circuit: Vets can waive USERRA rights