Purchased Vacation Time

[mcampb74]

What is the name of your state? PA

I work for one of the Big 3 auto companies. They are closing our branch in PA and for those not willing to relocate, we need to find other jobs. I recently found another job and gave my notice. I purchased 7 extra vacation days this year. I have paid for 5.5 of those days (the rest was to be deducted from my pay through the end of the year) and I have already taken 2.5 of those days. Now the branch manager will not allow me to take the three days that I have already paid for. I don't understand where this can happen where you pay for something and get nothing. Is there anything I can do? Where does this money go if it doesn't go back to the employee. They are telling me I have to forfeit this time (worth approx $450 to me!).

The company headquarters is in Michigan, of course.

 

[pattytx]

Was the additional vacation purchased through a cafeteria plan (pre-tax) or after-tax?

 

[mcampb74]

Vacation Time

It was deducted on a pre-tax basis.

 

[pattytx]

That MAY make a difference. Let me get back to you after I do some research.

 

[mcampb74]

vacation time

Got your response....thanks! Will wait to hear more.

 

[pattytx]

OK. Probably won't be till this weekend. I'm swamped at work and I'm just answering the low-hanging fruit till then.

 

[mcampb74]

no problem!

 

[pattytx]

Sorry this took so long.

I know there are regulations regarding the taking of vacation purchased with pre-tax deductions. Here is some general info from the Bureau of National Affairs payroll management resource:

“Cafeteria plans may include elective paid- va-cation days as a benefit. Under such arrange-ments, participants may use pre-tax contributions to purchase extra paid- vacation days. However, since cafeteria plans may not operate in a manner that ‘defers income’, elective vacation days must be used within the plan year for which the em-ployee made the election. In applying this rule, employees always are assumed to take their regular vacation days before using elective days."

And,

cafeteria plan related purchased vacation/PTO days cannot be carried forward between years. This means that unused vacation must either by sold back to the company (taxable event) or forfeited.

However, I could not find anything that requires that purchased vacation, whether under a pre-tax arrangement or not, be vested. Accordingly, as unfair as I think it is, it does not appear to be illegal.

 

[mcampb74]

As I read this however, I am assuming that the branch manager should have allowed me to schedule this time since It was already paid for. I knew I couldn't carry it over and I did give 3 weeks notice of my resignation and he still did not allow me to schedule it, causing me to forfeit the money involuntarily. I guess my next recourse it to make these practices public. The company is already having a public relations nightmare and may think twice about what's happening to these people. Honestly, I think it's the branch manager and HR has no idea what's going on. I want to make sure this doesn't happen to anyone else. I can live without my three days, but some people can't and it's not fair that a large company like this take advantage of their employees like this. Many of the employees have been there for 15+ years. I think it's terrible the way they are handling the whole thing. Thanks for your time and effort.