vacation time (non exempt employee)

[ginab]

What is the name of your state? CALIFORNIA

I am a non exempt employee at a 501c3 organization, which is in dire financial straits.

Our current policy manual says that when an employee leaves, they are paid their unused vacation time accumulated through the date they leave.

Can the organization refuse to pay if they do not have the money? Are they obliged to pay unused vacation time if an employee voluntary leaves? Are they obliged to pay unused vacation time of an employee is laid off? And are there any considerations to be made if the employee is non exempt?

I realize this is a lot of questions so if anyone has a web site that they can point me to I'd also appreciate that.

Thank you!

 

[Beth3]

Can the organization refuse to pay if they do not have the money? CA laws don't allow an employer to refuse to pay out vacation time upon separation.

Are they obliged to pay unused vacation time if an employee voluntary leaves? Yes.

Are they obliged to pay unused vacation time of an employee is laid off? If by layoff you mean an employee who is terminated due to lack of work, yes.

And are there any considerations to be made if the employee is non exempt? It makes no difference whether an employee is exempt or non-exempt.

CA employers must pay out earned but unused vacation at the time of separation. If the employer truly doesn't have the funds to do this, then I expect their only option is to be in violation of CA State regulations and let the State penalize them - which probably won't be paid either.

 

[ginab]

Beth3,
Thanks.

I should have clarified that by saying "laying off", I meant an employee that is terminated due to the company downsizing, for example. (I guess an employee is also considered to be laid off if their company shuts down altogether because they cannot sustain themselves financially any further? That's more of what I was thinking about.) I was not necessarily thinking of laying off as a result only of lack of work.

Thanks again. This was quite helpful. I thought companies were obliged to pay unused vacation in this state, but I did not know the details or whether there were any considerations for 501c3's.

Thanks again!

 

[Beth3]

I just wanted to clarify because to me (and other HR professionals), layoff means the employee is still employed but temporarily off work and subject to recall without loss of seniority. "Lay persons" use the word to mean they were terminated due to lack of work/downsizing. Legally, there's a big difference.

I don't believe being a 501c3 makes a bit of difference. An employer is an employer and they're all subject to the same employment laws unless they employ so few individuals they're below various threshholds required for compliance.

 

[cbg]

To the best of my knowledge, there are NO circumstances in which an employer of any kind in California is excused from paying out earned but unused vacation time at termination. If the employee was fired because you caught him with his hand in the cash drawer and his pocket stuffed full of cash and you had conclusive proof that he'd previously embezzled $20,000 from the company operations, you'd still have to pay him his earned but unused vacation time or be in violation of the law.

California law is very strict on this issue.

 

[pattytx]

California law is very strict on this issue.

Yes, they are.

Upon investigation of the unpaid wages claim, the state can also order the employer to pay additional waiting time penalties to the employee of up to the equivalent of 30 days regular pay, or until the required payment is issued (whichever comes first) to the ex-employee.

It would behoover this organization to find some funds somewhere to pay this out. It could cost them a lot more if they don't. Having said that, however, I guess you can't get blood from a turnip.

 

[cbg]

I have good reason to know how seriously California takes this.

Several years ago, an employee falsely reported to the CA DOL that we had not paid her vacation time on termination. It took the CA DOL about twenty seconds to send us a multitude of nasty notices that we were in violation and threats of what they would do if we didn't pay up.

Despite the fact that we had a great deal of evidence to prove that we had, indeed, paid the employee every penny that was due her and promptly submitted it to them, it wasn't until the employee admitted that she'd been paid, that they quit. And even then, they left the impression that they still suspected us of somehow having managed to wiggle out of our just due - sort of a, well, we'll let it go this time but don't let it happen again, attitude. Don't let WHAT happen again? The employee lied, not us.

So I would agree with Patty that if there is any way to find the funds to make payment, you do so. The CA DOL doesn't fool around.

 

[ginab]

Thanks for all your responses.

I really appreciate it.

Glad to know CA is on top of this one.

Thanks again!