Paid Time Off given at hire - accrued or not?

[mygoodness]

What is the name of your state? SD

Hello there.

I'm new to the board and am desperately looking for some advice regarding my situation. I would sincerely appreciate any info you might be able to share.

Forgive me in advance for a rather lengthy post. I have no clue what info would be considered vitally important to my situation. I thought it to be better to tell too much than not enough...

I recently accepted a position with a local investment firm. I left my previous long-time employer due to the travel requirements. I needed a local position that afforded me the ability to be home more often with my family.

Now, after only 6 weeks and 1 day, the new employer has let me go because the owner 'made a mistake and doesn't have the revenue to support my position'. Therefore, my position is being eliminated altogether and is not being replaced. Considering that my checking and savings balance together is only a couple thousand dollars, we're in a bit of a pickle to say the least. Can you spare a nickel? If I don't laugh about it I'll go crazy...

Here's the deal, when I accepted the position, part of my employment agreement included starting out with 2 weeks (10 days or 80 hours) of Paid Time Off (PTO). I had recently used 2.5 days of that time due to an unfortunate illness so the remaining time available was 60 hours or 7.5 days. The employer's Employee Handbook states - and I quote:

“Upon leaving employment, through either voluntary action or discharge, an employee is entitled to be compensated for accrued but unused PTO.”

The question then becomes, is this time considered 'accrued' time?

I have requested a payout of the remaining 60 hours of Paid Time Off. While I have absolutely no legal knowledge in this area (that's where you hopefully come in), my contention is that because the Employee Handbook does not reference the ability to ‘borrow’ from future, not yet earned or accrued PTO, one can only deduce that any hours available for immediate use must be considered earned or ‘accrued’ hours. Therefore, as it relates to my PTO, all 80 hours must be considered ‘accrued’.

Am I right, wrong or is this one of those issues that's never 'black and white'?

Obviously, I'm a bit angry about this situation - especially since the owner should have known he couldn't afford the position (if that's true) before even offering me the job. I can say with 100% assurance that this was not caused by anything related to me or my performance - as stated to me by the owner. However, with that said, I'm not the type who tries to be difficult or look for ways to 'get back' at the employer due to this situation. I just believe I'm entitled to the benefit based on the guidelines stated in the Employee Handbook.

Finally, if you can, please comment on this aspect too - unrelated to the PTO issue above. The owner offered me a small (actually insulting) severance because he felt 'bad' about the situation. The severance was/is worded in such a way that he would 'allow me to resign my position' in exchange for a measly $1,000. While I'm in no position to turn away $1,000, I have to believe this would jeopardize any chance at being approved for unemployment benefits.

Did he know that when he worded the severance offer that way? Will it really have an affect on receiving unemployment benefits? FYI - I have spoken with the South Dakota Dept. of Labor and they will not give specific advice without filing an actual claim. However, I was told it 'may' and 'likely could' have an adverse affect on being approved for benefits.

Should you be able to offer any advice on this issue as well, I'd greatly appreciate it.

Again, please accept my apologies for the long post. I hope none of you have to experience this situation at any point in your lives. I've never been in this situation myself. The thought of being unemployed for even a small period of time sickens me.

Such is life, I guess. The future is bright and I know I'll end up in a better position, smarter and stronger long after this experience is done.

Thanks for any help and advice you can offer. Best of luck to anyone who reads this post.

 

[cbg]

The thought that a six weeks employee is entitled to the payout of almost two weeks of vacation is evidence of an rather serious entitlement mentality. Likewise that $1,000 severance for an employee of such a short time is "measly". An employee of such short duration is lucky to receive any severance at all.

No, I do not agree with your contention. I will grant that the employer should have made clear how the time is accrued; however, it is by no means certain that the absence of something in the handbook means that you are granted the time free and clear on the first day. It is rare to the point of being almost unheard of that any employer provides PTO in a block on day one.

I am well aware of what it means to be unemployed. I've been there, done that and gotten the tee-shirt on more than one occasion. But it would never have even occurred to me that I would be entitled to receive an entire year's payout of PTO after only working 6 weeks. It would never have occurred to me to be insulted by an offer of severance because it was too small, when I'd only worked there six weeks.

The severance will not cause you to have benefits denied. It may, and probably will, result in benefits being delayed for the length of time the severance responds to. For example, if the $1000 represents two weeks work of wages, unemployment benefits will likely be delayed for two weeks.

 

[mygoodness]

cbg-

While your comments are rather direct, I appreciate them. Let me clear up a couple things.

First, I don't feel that I'm 'entitled' to anything that hasn't been committed to me. This isn't a situation where I believe I'm 'entitled' to PTO that would have been earned in the future.

This is a case where I was committed 2 total weeks, or 80 hours, of PTO as part of my employment agreement, or CONTRACT. Therefore, I believe the unused portion should be paid since the CONTRACT is being broken. There was no problem with me using 2.5 days, or 20 hours, when I was ill - which was obviously paid to me as part of my 'normal' paycheck. Does the fact that I expected to be paid for those 2.5 days in my paycheck also give the perception that I felt like I was 'entitled' to something that I shouldn't be receiving? Should I have expected to be paid nothing for those 2.5 days even though they were committed to me in our contract?

Again, my contention is that if the PTO is there to be used - and will paid equal to the 'normal' pay - on days that an employee is ill, then the same PTO should be there - and paid equal to the 'normal' pay - when someone leaves employment as the Employee Handbook states.

Additionally, with regard to the 'measly' and insulting severance offer, I'm not going to change my opinion. To pursue a person for 3 months, eventually hire them, and just 6 weeks later say they made a mistake which means they're out of a job is COMPLETELY UNACCEPTABLE. Leaving a family in a position where they're all of the sudden scrambling to pay their mortgage and sustain their livelihood isn't something that should be taken lightly.

So - yes - when an idiot business-owner makes a job offer to someone before understanding his company's complete revenue and profitability numbers, I AM insulted by a 'measly' $1,000 severance offer that isn't even equal to my 'normal' pay in ONE WEEK. And it makes it even more insulting when the severance is only payable if I RESIGN my position.

It's very probable you know a heck of a lot more about the legalities of these issues than me. With that said, since unemployment laws can be different from state-to-state, I'm afraid I'm going to have to take the advice of my own state's Dept. of Labor and NOT accept the severance since it will LIKELY keep me from receiving unemployment benefits.

You are correct, however, that should I accept a severance amount of $1,000, any unemployment benefits received would be delayed by the amount of time that money would have replaced my salary.

At issue is the fact the offer is worded that I would RESIGN my position instead of reflecting the reality of the situation - my position is being eliminated. If I resign, LEGALLY, and as stated on the Dept. of Labor's website - I would no longer be leaving at 'no fault of my own' and, therefore, would likely NOT receive benefits.

While I don't necessarily agree with your tone or your opinion at times throughout your post, I do appreciate your comments. I'm sorry to hear that you've had to experience job loss at any time in your working life. The fact is, I have not had to experience this situation. I, personally, don't look at it as though I'm joining a club or getting my membership t-shirt.

Reality is, my job was yanked away from me which has now put my family's financial well-being at risk. Because of that fact alone, if wanting to receive compensation from 60 hours of previously committed PTO is just another example of somebody feeling like their 'entitled' to something, so be it.

That contract you signed for your cell phone, if you disconnected or canceled your service within the first year or two likely meant there was a termination fee - let's just say of $175 in my example here. The same kind of fee exists for any DirecTV satellite TV subscribers, etc. So - let me ask - if you canceled your service and the company came calling you for that fee, are they 'entitled' to it? Are they just another example of someone feeling 'entitled' to something?

When you take that vacation from work, are you 'entitled' to be paid for that time? Whether you worked a year, 2 years, 3 years - whatever the amount - to get that vacation time, the fact remains that it's yours to use and you'll get paid for it when you use it.

In my opinion, while I may not have worked there for even 1 year, since they committed 80 hours of PTO to me in my CONTRACT, those hours are then just as good as the same 80 hours earned by an employee working their 20th year.

I realize the laws may state that PTO doesn't HAVE to be paid out when an employee leaves. However, should an employer want to pay out that time in the event an employee leaves, they may do so. As you know, that's what my former employer has elected to do.

It may very well be uncommon for employers to commit vacation time to a prospective new employee. In cases were it DOES happen, any amount of hours given as part of the contract should be considered 'accrued' hours since they're not being 'borrowed' from future, not yet earned PTO time.

You don't have to agree with my assessment of the situation. However, I'd appreciate it if you'd stop talking as if I'm trying to get something from this employer that wasn't previously committed to me.

The fact is, I would have accepted the severance offer had it not been worded that I had to resign. The fact is, had the PTO hours not been committed and credited to me on my first day of employment, I wouldn't be asking for any compensation at all.

The other fact is, the employer likely new very well that had I signed a severance offer which stated I was resigning my position, they would not be on the hook for unemployment costs in any way.

Tell me, does that make them more of a 'good guy' than me and my supposed 'entitlement' in this situation?

Give me a break.

The more I think about it, the fact that you think anyone who RESIGNS a position is eligible for unemployment benefits provides serious doubts about your knowledge in this area. Also included is the fact that your statement is in direct opposition to the ones made to me by the very people who approve benefits in my state. Admittedly, I have no clue about the unemployment laws in any other state outside of what I've learned during my situation. It's still very difficult for me to believe that ANY state would provide unemployment benefits for someone who ELECTS to leave their job on their own will.

 

[ecmst12]

You're posting an awful lot of words for someone whose request hasn't even been denied yet.

It's very unlikely that you had any sort of actual employment contract. It sounds like you were an at will employee, like 99% of the rest of the country, and can be terminated at any time for any reason. Unless you had a written agreement, signed by both you and your employer, stating that the 80 hours were granted on day one, AND they were payable at termination no matter when termination might occur, then you don't have a contract entitling you to it either. Having worked those 6 weeks, you have accrued about 1.5 days, if those 2 weeks were to represent a year's worth of time off. They MAY choose to grant it to you - but I don't think a judge would back you up, were they to refuse, and you sue them.

Before you turn down the severance, you may want to have a chat (not for free, probably) with an employment lawyer in your area. CBG is familiar with employment law in MANY states and the DOL can't give you advice.

 

[mygoodness]

You're right...my request hasn't been denied. Nor did I demand to be paid for the 60 hours of unused PTO. I only asked the owner if he would be willing to pay me for those hours since we DID include them in a written contract. The contract also included a non-compete agreement - which I'm being held to even though I never reached the point of working directly with any clients.

I do agree with you regarding the portion of your post referencing the payout of the PTO not being included in the contract. It is not included. The contract specifies the number of PTO days and hours being committed to me and states they're deemed 'fully credited' to me as of the date on the contract - my first day of employment. However, again, there's no reference to payout after termination.

That's why I referenced the Employee Handbook. When I asked the owner if he'd compensate me for the unused hours, he said he'd do whatever the Handbook said to do. If that's the case, my interpretation is that I'd be paid for the unused hours since the Handbook indicates as much.

Again, I do appreciate the comments. Although, I thought this was 'freeadvice.com' and not 'myfreeopinionaboutyoubecauseI'mGod'sgifttothisforum.com'.

I don't mind receiving differing opinions but I very much dislike being described as a type of person that I'm not...especially when I'm a complete stranger to you.

cbg may very well know a lot of info on labor law, unemployment, etc. However, it doesn't take a rocket scientist to know that if you resign from your job, 99% of the time you're not going to be eligible for unemployment. Of course, there's always exceptions - such as resigning one's position because your physician says your job is dangerous to your health. In those cases, unemployment may very well be paid. Outside of those types of situations, if employees who resigned their positions received unemployment benefits every time they quit a job, the system would be in complete disarray and there wouldn't be benefits for anyone because there wouldn't be any money to pay out.

I read a lot of posts on this board before posting my own comments. I was hesitant to post and now I'm sorry I ever did. Instead of providing advice, many times, people were/are berated and belittled with advice sprinkled in between those posts.

Please accept my apologies for wasting your time.

 

[ecmst12]

Quitting your job for medical reasons will definitely bar you from unemployment. You have to be PHYSICALLY able to work and actively seeking work, in order to qualify.

The reason why the severence agreement would not likely bar you from unemployment is because you clearly WERE laid off, you did NOT quit, no matter what the agreement says. The unemployment commission is designed to be somewhat biased in favor of the employee, and your employer is using a sneaky trick to make it LOOK like you quit instead of being laid off. The UC should not let them get away with the sneaky trick.

 

[cbg]

For the record, "resignations" such as you have described here count as terminations for unemployment purposes in most if not all states.

So the rocket scientist comment is unwarranted. I knew that - evidently you didn't.