Can an Ohio company change it’s vacation payout policy for exiting employees after their start date in order to no longer pay out unused vacation?

UPDATED: Oct 1, 2022

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Can an Ohio company change it’s vacation payout policy for exiting employees after their start date in order to no longer pay out unused vacation?

During the hiring process, the company
presented a policy document that I still have
that specified the payout of any earned but
unused vacation upon separation. A few years
ago they changed the policy without notifying
the employees to no longer payout unused. Now
that I am leaving, is the company required to
honor the original policy? This is an Ohio
company and the policy documents are not
signed. Thanks

Asked on July 8, 2019 under Employment Labor Law, Ohio


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

A company can change its vacation payout policy (though if they do, they generally have to give you some reasonable chance to either use the days or else to, if you wanted, quit/resign and be paid out per the old policy) but they can only do so on notice: that is, to be effective, employees must be told of (given notice of) the policy change, generally in writing, and the new policy is only effective after the notice. If they never notified employees--i.e. they never provided notice prior to you leaving employment--they have to honor the prior policy. But if you received notice while still working there, even if you did not receive it when the policy was first changed, then subject to giving you some chance to either use the days or else quit and cash out the days, they can change it: they are not locked into the policy forever, but can change it on proper notice.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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