Do you lose your vacation when changing job

[SouthernCruizer]

I am considering taking on a new position in a new company and currently have over 110 hours of vacation. It is a rolling system(PTO), so I have been accumulating it for a while. Question is. Does law require my current company to pay off my vacation or do I loose it?
Thank you.

************************************

Cougar, this is what I suggest based on my case this last year...go to your state's labor law website. Search for the area of the law that pertains to benefits payable when terminated. Next, get your HR dept to give you a copy of the pertinent policy. Do this before you leave employment. If you find the law is on your side and you are NOT paid after you leave employment, send a certified copy of a demand letter for your wages, and I suggest putting a copy of the labor law with it. If this does not persuade them to follow the law, then you will have to get an atty. to take it to the next step.

Good luck!

Jay

'04 FJR 1300

 

[SockMonkey]

I totally agree about the bad information part...thus..here is the section from the La. Dept of Labor pertaining to vacation pay..
What is the law concerning payment of wages to employees?

Final Paycheck

Louisiana employees who are laid off, fired, or who quit must be paid their wages in full at the next regular payday, not to exceed 15 days from the date of their discharge or termination. Wages include vacation time earned by the employee. An employee should send a written demand for payment of their final wages to their employer. After receipt of a written demand, the employer must pay all wages owed to the employee on a timely basis or be subject to a penalty that may be imposed by a court. Claims against an employer for late payment may be filed by way of a private lawsuit. The Louisiana Department of Labor does not have the authority to enforce this law. You may review this law at (R.S. 23:631) - (R.S. 23:632).

Take special notice of line 2 in the above paragraph "Wages include vacation time earned by the employee"...you need to check your sources about vacation time...

If the law as written on the books is not enough proof, I got the 28K stub (compliment of the court) that says you are owed accrued vacation pay , at least in La.

Jay

'04 FJR 1300

Circumstances would have absolutely defined your case, given the state has no authority to enforce its own law. (I like that...) I'll take a leap and say that it was more than just your accrued vacation pay that your previous employer owed you..?

But it's funny that you bring up LA, because I've won exactly this argument in that state (and a similar situation in TX) against a former employee that was terminated for cause. He was terminated with an accrued PTO balance of 45 hours that he believed he was entitled to because of "the law" you cite above. Why did I win? Because our employee manual specifically addresses payment of accrued wages and any accrued benefits upon either voluntary or involuntary termination (including for cause). Once the manual was shown to the small claims court along with the signed acknowledgement page showing the employee had read and understood its contents, the case was dismissed and the (now former) employee got nothing except the accrued wages which had indeed been paid in a timely fashion. Circumstances and written documentation defined the situation.

 

[Fred W]

I am considering taking on a new position in a new company and currently have over 110 hours of vacation. It is a rolling system(PTO), so I have been accumulating it for a while. Question is. Does law require my current company to pay off my vacation or do I loose it?
Thank you.

The new employer is not required to grant you any more than "starting" vacation time, whatever that is.

So, no.

 

[cougar8000]

I am considering taking on a new position in a new company and currently have over 110 hours of vacation. It is a rolling system(PTO), so I have been accumulating it for a while. Question is. Does law require my current company to pay off my vacation or do I loose it?
Thank you.

The new employer is not required to grant you any more than "starting" vacation time, whatever that is.

So, no.

Fred,

Question is regarding my current employer, not my future.

 

[cougar8000]

Thank you all for your input. Unless my original contract that I have signed almost 10 years ago allows them not to pay me my accrued vacation, I should be OK. What I signed then I have no idea nor copy. And not about to walk into the HR and ask for it.

I have accept the offer today from a new employer. Now I have to wait for an extensive back ground check.

 

[evil_henchman]

You should ask them to pay it out over time as if you're actually taking vacation. Otherwise under federal law it's considered a lump sum bonus and 25%+ on top of your regular witholding is witheld. I don't know about you but I think 50% tax takes the fun out of any paycheck.

 

[cougar8000]

You should ask them to pay it out over time as if you're actually taking vacation. Otherwise under federal law it's considered a lump sum bonus and 25%+ on top of your regular witholding is witheld. I don't know about you but I think 50% tax takes the fun out of any paycheck.

Are you for real :blink: I sure hope they will not do that. When I checked the policy it said nothing of this sort. I hope you are not right.

 

[evil_henchman]

You should ask them to pay it out over time as if you're actually taking vacation. Otherwise under federal law it's considered a lump sum bonus and 25%+ on top of your regular witholding is witheld. I don't know about you but I think 50% tax takes the fun out of any paycheck.

Are you for real :blink: I sure hope they will not do that. When I checked the policy it said nothing of this sort. I hope you are not right.

I guarantee they'll do that. It's an IRS thing. The only other option you have is to claim tax exempt (or a buttload of dependants) for that check.

 

[CRMH Eagle]

It is governed first by state law and secondary by corporate policy. You should contact the Dept of Labor in your state as well as review any contract you signed when taking the position, as well as reading up on the corporate policy. You can always set up an anonymous gmail or yahoo acct and email the question to you HR dept... of course don't sign your name. You can always negotiate these matters as part of your willingness to stick around a week or two longer or come in on weekends to help out for awhile.

You should also know that state law dictates when you must be paid. Here in Colorado unused pto and vacation must be paid out regardless and done so within a 48 hour window (or somewhere in there) of the last day worked.

However the matter is taxed... any taxes taken will be applied towards you "taxes due" on your personal return, so it's not like you're losing any more money than if taxed "normal."

I'm 98% sure it is not a lump-sum distribution since that is usually referred to retirement monies distributed before the appropriate distribution date. You can't ask the HR dep to pay it out over time cuz state law may require immediate distribution. Again, contact Dept of Labor and your HR dept anonymously. Further, you can always negotiate for additional pto/vacation time at any new job.

 

[evil_henchman]

I'm 98% sure it is not a lump-sum distribution since that is usually referred to retirement monies distributed before the appropriate distribution date.

Ok so maybe it's not called a lump sum distribution but it most certainly is subject to mandatory supplemental tax at 25% federal and varying amounts by state. It's happened to me more than once and I made one former employer show me the IRS rule. I couldn't find anything on the IRS site (imagine that) but I found this: Link

Any accountants or payroll types can verify.

 

[germany]

Careful... Again, unless otherwise provided in writing by the employer, there is no law anywhere in any state that says an employee is "due" their accrued leave upon separation. Accrued leave is indeed a liability on the balance sheet, which is why most employers have a "use-it-or-lose-it" policy. Our employees (including me) lose all unused PTO on January 15th of each year. Liability gone.

Unless I'm reading this wrong, California has a law that states an employee is due their accrued leave upon separation/termination for any reason (of course there is always an "stipulation").

Q. What happens to my earned and accrued but unused vacation if I am discharged or quit my job?

A. Under California law, unless otherwise stipulated by a collective bargaining agreement, whenever the employment relationship ends, for any reason whatsoever, and the employee has not used all of his or her earned and accrued vacation, the employer must pay the employee at his or her final rate of pay for all of his or her earned and accrued and unused vacation days. Labor Code Section 227.3. Because paid vacation benefits are considered wages, such pay must be included in the employee’s final paycheck.

The Department of Industrial Relations databases just went down for maintenance so I can't check their definition of a "collective bargaining agreement" but I am pretty sure the term applies to unions not individual employees.

My previous employer's Employee Handbook outlined a "use it or lose it" policy regarding PTO. Since my employment was not part of a collective bargaining agreement the policy was illegal in CA (as MadMike pointed out). Time off can be capped, paid out or you can even be told when to take paid time off but it cannot be simply taken away because you did not use it.

That being said, if you are working for a company headquartered in another state like I did, check your state's labor division; just because the handbook says it (and the HR department for that matter) doesn't necessarily make it legal in your state of employment.

 

[SouthernCruizer]

Cougar, as you can see, there are various opinions...but do your homework, and check the labor law website in your state. Basically, the guys saying that you are NOT owed your EARNED/ACCRUED vacation time are probably WRONG. State law of the company’s domicile is the ruling body here, PERIOD. Regardless of company policy (which in my case, was unlawful as per the parish court)

Collective bargaining agreement is in fact a union term, does not apply to individuals.

Monkey, small claims court???? how much did the guy make, $.10/hour??'Small claims court is for claims under a certain amount, usually under $2500 or so, and to take pay issues to small claims court seems unwise to me. This is definitely a time when you would want a labor law atty.

Vacation pay is NOT a lump sum payment, it is handled the same as any wage earned. The taxes are deducted according to the tax table, just like a regular payroll check.

For the record, I am a comptroller and recent recipient of a successful award for non-payment of vacation time (Monkey, it was ONLY vacation owed me)

Watch out for misinformation (how ironic, eh Monkey?) LOL

Jay

'04 FJR 1300

:dribble:

 

[Bounce]

Upon departure, our vacation time is paid at the same value as if the hours had been used during a payperiod and you got your same paycheck (base+locality pay). The trade off is that vacation can only accumulate up to a max of 240 hours a year. Anything over that not used within the year is lost (use or lose). Sick leave balances are paid out at some fraction on the dollar value (half? third?). The up side is that, while it doesn't accumulate as quickly, it doesn't have the cap (I currently have about 1000 hours of sick time).

 

[Murph]

Sheesh...I've been watching this since the first post and my head is still spinning. Alex, I feel for you.

I think I'm just going to take all my vacation time and then quit ... then I won't have to face this dilemma! :lol:

 

[weekend rider]

Best answer get out your contract it will spell it out of go to human resources and ask...

 

[cougar8000]

Best answer get out your contract it will spell it out of go to human resources and ask...

Aga, easy to say. 10 yrs ago I had no idea I would ever need to look at it. :dribble:

 

[Fred W]

Best answer get out your contract it will spell it out of go to human resources and ask...

Aga, easy to say. 10 yrs ago I had no idea I would ever need to look at it. :dribble:

Also, not everyone works under a "contract".

Where I work they have a use it or lose it vacation policy. Also, sick time does not accrue.

It's just not the same everywhere...