Paying Leave

HCCADC

My company has replaced vacation, sick and personal leave with what we call General Leave. We have our employees earn it before they can use it. We also have stated in our Personnel Policy Manual that we do not pay out General leave if employment terminates. I recently had an employee tell me that her labor law compliance lawyer said that it is illegal for us not to pay out General Leave because it is part of the compensation due to the policy of earning it before using it. Does anyone know if this is illegal? I don't want to have Labor and Law come in. Thanks!! Have a good day!

cthr

You really need to check with the DOL in your state. Some states require the payout of accrued, unused vacation, PTO, etc. at termination.

Rockie

Depends on your state. In South Carolina, our counsel has advised that if we have a policy that we don't pay out leave unless certain criteria are met, then we don't have to pay it out. Otherwise, if you have no policy on this, you should probably pay it out or if your state mandates that you do so, you should pay it out.

I guess my personal feeling is if this is "earned" leave, then the employee is entitled to this leave when they terminate.

HCCADC

Thank you for your reply. We specifically state in our PPM that our General leave does not vest and we do not pay it out. I called Labor Law Compliance and our state does not regulate 'benefits'. I guess my 'iffy' part was that our employees cannot use it unless they earn it. Maybe this is something that we need to change, but the reason we have it that way is b/c it was abused in the past. What a dilemma!!