Some employers have retooled the traditional method of setting paid time off in separate categories by folding vacation, personal, or sick leave entitlements into one “bank.” These so-called paid time off (PTO) programs allow workers to use banked time without designating the reason for taking a day or multiple days off from work. PTO offers benefits for employers and employees alike, but there are some potential pitfalls if you are not careful.
Severance plan documents sometimes stipulate that employees who are fired “for cause” are disqualified from benefits. That places a burden on plan administrators to fairly review the facts before making a benefits determination. This includes checking out the employer’s policies, procedures, and enforcement. If an employer was lax in any of these areas, and benefits were denied, they may be called on the courtroom carpet for violating the Employee Retirement Income Security Act (ERISA).
The Department of Labor (DOL) issued final notice rules under the Consolidated Omnibus Budget Reconciliation Act (COBRA), which contain changes to notice requirements that have been slightly altered from the proposed rules.