Is an employer legally obligated to pay a former employee for unused vacation time?
Find answers to your legal question.
Is an employer legally obligated to pay a former employee for unused vacation time?
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If a business is sold and the former employee goes to work for the new owner with all of the benefits remaining as is, including vacation time, is the new owner obligated to honor the employees scheduled vacation time with pay? Or is the former employer required by any legal federal or state labor law to pay for the unused vacation time?
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michr
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in most states the law only requires that the employer follow their stated policy.
in the case as you state it; the new employer owes you nothing unless they had agreed to honor all previous vacation policies.
if you were in a state such as California the previous employer would owe you for the accrued time. California is the only state that requires that vacation time be paid regardless of why the separation takes place (quit or fired with notice or without) there are a few other states that do require accrued time to be paid at separation unless the employee is terminated for misconduct or they quit without working out an agreed to notice period. |
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Peter J
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depends on the contract, both yours with the first co, and the co which took over the first co.
at a guess i would say the first co may be liable , bit not the new co.
many variables. |
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zeuz
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In California, vacation is treated as "earned compensation". So, if you're in California, then I'd bet the employee is entitled.
You really should consult with your Department of Labor, and with the attorney, who assisted you in negotiating the purchase. |
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katerbecker
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When you get hired and they offer you the benefit of paid vacation, they let you know the terms up front. If all the benefits remain as is, then the agreement stands. If the previous benefit stated that the vacation time had to be used or be paid out at a certain rate before a certain time or voided, the agreement would still stand. The terms of vacation time are always spelled out by company policy. There is probably also a provision in the policy for what happens if the employee is terminated or quits with or without notice.
I'm pretty sure Federal labor law has nothing to do with vacation time. It is possible that different states have different standards. |
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