Ambiguous Employee Policy about Vacation Accruals

[Crispix]

What is the name of your state? California

I quit my job after only working 3 months. The company paid me in full, but did not pay any unused vacation pay. The question is whether or not I had accrued any vacation pay. The company's employee handbook states: "New employees can take a vacation after 4 months of service. Employees are eligible for vacation pay based on their start date and can take up to 10 days for every full year worked." Since I started in January, the vacation policy indicates that I would be eligible for the full 10 days. Had I started in June, only 5 days, etc.

The policy also states that employees who quit before 6 months of service lose any accrued vacation pay. Since this is in California, I know that use it or lose it policies are invalid . . . so . . . did I accrue any vacation? Does the policy show that I had accrued a full 10 days of pay? Or did I only accrue a pro-rata share of vacation time? The policy is silent on the actual accrual date, but seems to indicate that I had something to lose since I worked less than 6 months.

It gets more complicated . . . my pay stubs always showed 0 days accrued, and I did take a couple days off after only working a couple weeks and did not get paid for those days. I believe the company was pretty consistent in only granting vacation days after employees had worked 4 months, so their practice is clear, but the written policy certainly seems to be either illegal or so ambiguous that I should at least have been given a pro-rata share of vacation pay (2 days worth when I quit.)

What would the California labor board say? If the company was willful in denying my vacation pay, I could get some damages out of them, right? If the employee policy is illegal, does that mean they were willful? I have asked them to pay me for 2 days of vacation, but they say I didn't accrue any vacation because I had not worked at least 4 months.

 

[cbg]

The policy can SAY anything it wants. They haven't broken any laws until they DO something that violates the labor code. So the fact that the policy SAYS that employees who quit inside of three months forfeit accrued time is immaterial to your situation, even if, on paper, it does violate CA law.

It seems clear to me that vacation STARTS accruing after 4 months of service, but then accrues retroactively to the start date. This is not unusual - I've seen policies like this before. The fact that your days off were without pay AND the fact that your paystub says 0 days accrued seem to support this.

You are free to call the Labor Board if you wish, but in my opinion they have not violated CA law.

 

[Crispix]

thanks for the reality check

Cool. Thanks for the advice. I should come clean now and tell you that it's really the other way around -- I actually represent the company, not the employee. We're just trying to figure out how he can reasonably think he's entitled to vacation pay when we think our policy is pretty clear (but not clear enough, eh?). I've found the best way to think about these things is to put myself in the other guy's shoes.

The labor board hearing is actually this Friday, so I'll post the outcome when I find out.

We did run this past our corporate attorney of course, but the amount in question is too small to justify running up a huge legal bill. We'll just let the labor board decide.

Obviously, once we're done with all this we'll have to modify the employee policy to make it crystal clear how the company implements this vacation plan. Another tip to employers out there -- just because an employee policy is valid in one state (ours came from Colorado), doesn't mean it's valid in others. This is one of those cases where paying a lawyer for a couple hours to review an existing policy would have saved a big hassle.

 

[cbg]

Well done. The tricky part, of course, is the insinuation that accrual starts on day one but you appear to have sufficient documentation to support that it's a retro accrual. Of course, one can never tell what the CA Labor board will do.

You are absolutely right that state law varies tremendously and what is legal in one state may not be legal in others. If it's just a question of things like vacation pay, however, there are a number of web sites where you can check things like that without paying an attorney. Most states post their employment laws on line (although I grant you, some are much easier to interpret than others.) You can always bring in the lawyer if the web site information is unclear.

 

[Crispix]

Hearing was today

The hearing was today -- the Labor Commissioner is taking 15 days to serve us with his ruling, so we'll see what happens. His questions seemed to indicate that this type of retroactive cliff vesting may be a problem -- that you can have 0 vacation days on one day and suddently accrue/vest up to 10 days the next. In any case I'll post the outcome here in a couple weeks.

 

[Crispix]

What the labor board decided . . .

Got the decision today -- the labor board decided that the employee was indeed entitled to a partial year of vacation pay. "Since the policy states that employees are eligible for up to 10 days per year, and the employee worked for a partial year, he is entitled to partial vacation pay."

Go fig. So we owe him a couple days pay plus interest, but no penalities. Not bad.