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Thread: California busniess closing, earned vacation time paid to employee? California

  1. #1

    Exclamation California busniess closing, earned vacation time paid to employee? California

    The company I work for is selling to a new owner, and I (as well as many others) have vacation time accrued. My anniversary was in Dec so I have 10 days paid vacation time coming. I googled to see if my employer has to pay me (cash out) my vacation time when his company closes.
    I saw that "Labor Code Section 227.3 states that all earned vacation time must be paid to an employee when employment is terminated.
    Upon termination of employment, California law requires employers to pay employees all earned vacation pay, at the final pay rate of the employee." This is where I got the info: http://www.ehow.com/about_6367514_ca...ation-law.html

    Since the company is closing, that is considered termination, and therefore he has to pay me for 10 days of vacation time, plus any accrued time since my anniversary date to the day we close. Is this correct?? Are there any loopholes? If he does not pay for my vacation time, I can go to the labor board, correct?

  2. #2

    Default

    While I'm not in CA, I was involved in a buyout. I was retained by the new owner as an employee. My vacation was not cashed out at the time of the buy out, but rather it was available for my use after the buyout.

    So, are you going to be employed by the new owner? That could make a difference in the advice you get.

  3. #3
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    Default

    If you are going to be employed by the new owner then your employment is not considered terminated. In this case, what happened to chyvan could happen to you, and this would be legal.

  4. #4
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    Default This is state specific

    It may be a termination, it may not be--

    Texas, for example, considers the sale of a business to be a termination of all employment, and the employer (seller) is liable for any vested debt to (former) employees. The new employer (buyer) may offer employment to whomever they choose. Not all states do that, and I don't know enough about the vagaries of California labor law to venture an opinion.

    DAW, are you out there?

  5. #5
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    I am here. I just do not have anything definitive to add. Vacation in CA is legally vested. Someone is required to pay out the vacation sooner or later.

    IF the employee is not paid out the vacation balance AND the balance is not rolled over to the new employer THEN the employee has a claim against the original employer. If the vacation is rolled over to the new employer, then that employer is not required to quickly pay it out. I am not sure what else I can say past that.
    "Reality is that which, when you stop believing in it, doesn't go away".
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  6. #6

    Default hmm

    The new owners have informed us that they will not be carrying over any seniority and/or vacation time. We are basically starting at a whole new job that just happens to be in the same building. Also, we all had to fill out applications and will be interviewed, meaning the new company may not hire us for our current jobs. The business is changing names completely, so it is as if its a new company in a new building. We are not going to be just changing owners with the same company name. Its a fresh start--if we get hired on that is.

  7. #7
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    File a wage claim with CA-DLSE. It is likely the old owners who will be held responsible, but at the end of the day, the only party whose opinion matters is CA-DLSE.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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  9. #9

    Default Bankruptcy?

    I went through something similar a few weeks ago. My original company went into bankruptcy, and up to 2 weeks of employee vacation accrual was written into the filing. Our new company honored vacation accrual per the bankruptcy filing and subsequent purchase agreement. My state is not CA, however.

    My question to OP - is bankruptcy involved?
    My question to DAW, et al - does it even matter?

  10. #10
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    Exclamation Das ist in der Doktor!

    Quote Originally Posted by henbob6 View Post
    I went through something similar a few weeks ago. My original company went into bankruptcy, and up to 2 weeks of employee vacation accrual was written into the filing. Our new company honored vacation accrual per the bankruptcy filing and subsequent purchase agreement. My state is not CA, however.

    My question to OP - is bankruptcy involved?
    My question to DAW, et al - does it even matter?
    henbob6, Please start your own thread.
    Your situation is in no way similar to the thread you've hijacked for a number of reasons.
    It would be less confusing to the responders and greatly enhance the likelihood
    of getting an answer.
    Thank you.

    .._________________
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    …you get what you pay for. ~ drr

  11. #11

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    Quote Originally Posted by drruthless View Post
    henbob6, Please start your own thread.
    Your situation is in no way similar to the thread you've hijacked for a number of reasons.
    It would be less confusing to the responders and greatly enhance the likelihood
    of getting an answer.
    Thank you.

    .._________________
    ~ Free advice is like your public defender,
    …you get what you pay for. ~ drr
    My own situation is resolved. Forgive me for not making that clear.

    I was asking THE OP if his/her original company had declared bankruptcy. We were caught unaware that that bankruptcy was part of our takeover, and that we would, in fact, NOT be entitled to all vacation we had accrued. I could have easily asked the same question a few months ago and not known or thought to mention bankruptcy.

    I directed a comment pointedly to DAW to see if bankruptcy added another slant to the OP's situation, that's all.
    Last edited by henbob6; 02-29-2012 at 05:56 PM.

  12. #12
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    Thumbs down Das ist in der Doktor!

    Quote Originally Posted by henbob6 View Post
    Pardon me, Dr. Ruth Less? My own situation is resolved. Forgive me if I did not make that clear.
    Perhaps I missed that snippet of information. However, upon closer examination of your post,
    I think it would more accurate to point out that you failed to mention it at all.
    I was asking THE OP if his/her original company had declared bankruptcy. Many of my colleagues were caught unaware that that bankruptcy was part of our takeover, and that we would, in fact, NOT be entitled to all vacation we had banked.

    I did mention that my state is not California. I said my situation was "similar," but I never said "exactly the same,
    Neither did I.

    and therefore my experience will be of the utmost value to you,
    ??? I'm sorry, did you mean to say, "and therefore my experience will be of no value to you"?? If that is the case, then we have found common ground on which to stand.

    despite my lack of knowledge of California state law and bankruptcy statutes." I therefore directed a comment pointedly to DAW to see if bankruptcy added another slant to the OP's situation.
    As I politely tried to point out,
    Your slant was ill placed as well as irrelevant to the OPs situation

    Sorry to have offended you, good doctor.
    Think nothing of it,
    You haven't

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  13. #13
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    In CA, vacation is just another type of due wages. Legally no different then other types of due wages. If a bankrupcty is involved, then all due wages (including vacation) can be caught up in the process. What is different about CA is that vacation once earned is legally vested under CA law. Not a matter of company policy. Most states do not care about vacation balances, and most of the remaining states tend to have "follow your policy" rules. CA is fairly unique in that the rules explictly vest vacation as wages. No "use or loss it". No other little policy "gotcha" common in other states.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

  14. #14

    Default

    Thank you for responding, DAW! I always learn from your answers!

  15. #15

    Default

    Thank you for all the information. No there is no bankruptcy involved, just a sale. So if we do not get our vacation time cashed we will all be filling claims. Thank you again, you can close the post if you need to.

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