Vacation allowance will be earned based on an employee's years of service as follows:
1st through 4th Year - 10 days (two weeks)
5th through 9th Year - 15 days (three weeks)
10th Year and Longer - 20 days (four weeks)

At the start of this policy on Jan 1, 2003 it was interpreted in-house that you began your three weeks at the end of your fifth year (five year anniversary) or the end of your tenth year (ten year anniversary).

Recently an outside service has taken over vacation accrual. They read our policy and determined that your three weeks begins at the *beginning* of your fifth year (after your fourth year anniversary) and at the *beginning* of your tenth year (after your ninth year anniversary).

The policy has not changed, but the interpretation has. The company now goes with the interpretation of the outside service. Was the previous interpretation wrong in any way, and if so would any action be necessary on the part of the company to correct the misinterpretation?

Thats why they call it an interpretation. There is nothing wrong with the company interpretating it way and the outsourced company interpretating it another way.

And honestly, I agree with the second interpretation. It mentions year 1 through year 4. Then it jumps to year 5. If you had meant it the way you were interpreting it, it should have said year 1 through year 5 and year 6 through year 10.

If no one has challenged you on this I wouldn't worry too much about it. However, should a terminated employee file a claim stating he didn't get all the vacation due him, the DLSE might want to see the policy and, I'm thinking, would interpret it the same way I have.

Thank you for both replies. While I agree with mlane58's viewpoint, I would suspect that the company could be forced to pay up if the policy came under scrutiny.

Patty - I'd be the challenger in this case. There are thirty plus people I know would be effected by this ruling if it went in favor of paying the vacation back to the employees due to the old interpretation. The issue is not, of course, widely known.

This turns into another "do you like your job, and is it worth the amount of money you'd get" deals. Some people could be out two weeks worth of vacation though, which adds up to a decent chunk of money. Sigh.

Not your question, but that is a poorly written policy, particularly for a California employer. Well written policies do not need to be interrepted. Well written CA vacation/PTO conditionally earn vacation/PTO on a pay period or monthly basis looking at total complete months of service at the beginning of each accrual period. Since in CA vacation/PTO accrual is a legally vested benefit, and at least some CA employees file claims with CA-DLSE at a drop of the hat, it (IMO) makes a lot more sense for the employer to just re-write the policy to say exactly what they think it means.

There is another issue you did not raise. Legally the employer can change the interrepation on a go forward basis (or just rewrite the policy) as long as they do not mess with existing balances. If the employer in question tried to "interrept" the policy in such a way to retroactively change balances, then the employer is at great risk for any employees who choose to file wage claims.

Also, legally "the service" is just the agent of the employer, and the employer is responsble for the agent's actions.

Not your question, but that is a poorly written policy, particularly for a California employer. Well written policies do not need to be interrepted. Well written CA vacation/PTO conditionally earn vacation/PTO on a pay period or monthly basis looking at total complete months of service at the beginning of each accrual period. Since in CA vacation/PTO accrual is a legally vested benefit, and at least some CA employees file claims with CA-DLSE at a drop of the hat, it (IMO) makes a lot more sense for the employer to just re-write the policy to say exactly what they think it means.

There is another issue you did not raise. Legally the employer can change the interrepation on a go forward basis (or just rewrite the policy) as long as they do not mess with existing balances. If the employer in question tried to "interrept" the policy in such a way to retroactively change balances, then the employer is at great risk for any employees who choose to file wage claims.

Also, legally "the service" is just the agent of the employer, and the employer is responsble for the agent's actions.

Yep, DAW, the "poorly written policy" was my point exactly. You explain it so much better than I do, though. ;)