What care my rights to vacation pay in light of a company policy change?

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What care my rights to vacation pay in light of a company policy change?

I worked for 6 years and had to leave this year because my wife’s doctor recommended that she relocate to a different environment due to health reason. I gave my notice of resignation 7 months ago on the 4th of the month, with my last day being the 15th. I had earned 4 weeks of vacation for my 6 years of service and I expected to be paid for the 4 weeks but I was told on the 13th when I received my packcheck that the vacation policy was changed on the 1st (just days before I handed in my notice) and I will only be paid for time earned (i.e. 1/12 of my vacation) because their fiscal year started on the  on the 1st. I spoke with the HR representative and she did say that the policy was changed and not “everyone” was made aware of it. As a matter of fact the managers at the facility I worked at were unaware of the change. When I found this out I requested to take the balance on my vacation time, approximately 3 1/2 weeks, starting the 13th when I was still an official employee of the company. I was told that I could not because I gave notice. I was of the impression that as long as I was an official employee, I would eligible for benefits as any other employee. In addition, the policy change was not made known to everyone, even the managers. The previous policy states that employees will be paid all unused vacation time upon termination.

Asked on November 28, 2011 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

As a general matter, a company may change its vacation policy, including its policy regarding paying out days upon resignation or other termination of employment--though there are limitations on a company's ability to take away the ability to be paid out for days already earned, without at least providing some chance to use them.

However, there is no need to even consider whether they could, in this case, limit your vacation pay out because any such policy change is only effective on notice. If the company did not provide notice of the change--either specifically to you or more generally in a communication to all employees (so they could show that even if you missed the communication for some reason, they had at least properly sent it out)--then they cannot "retroactively" apply the policy. From what you write, notice of the policy change appears to have been defective--therefore, it should be ineffective, since as far as you were or could be aware, as of when you provided notice of resignation, you were still entitled to full  vacation pay out. If the company will not voluntarily honor the policy then in force when you resigned, you will have to sue them to seek to enforce the then-existing policy.


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