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Settling PTO owed from previous years California

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  • Settling PTO owed from previous years California

    Can a company elect to "settle" owed PTO for 2008 for less money? Employees accrued a large number of PTO days and at $854.00 per day, it is a large sum of money to be paid out. Company wants to settle if owed employees are in agreement for roughly 40% of the value owed. Can they do this and if so, do I need to draft a settlement and release to cover company?

    Thanks.

  • #2
    Not legally. Any employee effected by this should immeadiately file wage claims against your company with CA-DLSE.

    http://www.dir.ca.gov/dlse/FAQ_Vacation.htm

    There is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time. However, if an employer does have an established policy, practice, or agreement to provide paid vacation, then certain restrictions are placed on the employer as to how it fulfills its obligation to provide vacation pay. Under California law, earned vacation time is considered wages, and vacation time is earned, or vests, as labor is performed. For example, if an employee is entitled to two weeks (10 work days) of vacation per year, after six months of work he or she will have earned five days of vacation. Vacation pay accrues (adds up) as it is earned, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination. (Suastez v. Plastic Dress Up (1982) 31 C3d 774) An employer can place a reasonable cap on vacation benefits that prevents an employee from earning vacation over a certain amount of hours. (Boothby v. Atlas Mechanical (1992) 6 Cal.App.4th 1595) And, unless otherwise stipulated by a collective bargaining agreement, upon termination of employment all earned and unused vacation must be paid to the employee at his or her final rate of pay. Labor Code Section 227.3 The California Legislature, in order to ensure that vacation plans were fairly and equitably handled, provided that the Labor Commissioner was to "apply the principles of equity and fairness" in resolving vacation claims.
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      I agree with you and have reiterated the laws to my superiors. Can a settlement and release agreement absolve us from liability? In other words, if the employees agrees to the settlement and signs a contract?

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      • #4
        No. ...........
        "Reality is that which, when you stop believing in it, doesn't go away".
        Philip K. **** (1928-1982)

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        • #5
          $854 a DAY? What do these employees do, anyway?
          The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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          • #6
            Are you thinking one (each) employee? That's what I thought at first then thought surely that can't be right. (What do they do!) I then thought maybe they mean average total per day for all employees combined. I don't know though.
            Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

            Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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            • #7
              I had an employer once who tried to do that. I was glad when that job was eliminated.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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              • #8
                this is their daily rate...not averages. Highly compensated individuals, highly educated. I have called counsel and should know if we can do this.

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                • #9
                  Your employees cannot sign away rights to money that is already theirs. Vacation, in California, is an employee's once it is accrued.

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                  • #10
                    Look question #10 here. It says that vacation must be paid out at the final rate of pay.
                    http://www.dir.ca.gov/dlse/FAQ_Vacation.htm
                    Last edited by Pattymd; 05-29-2009, 06:58 AM.
                    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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                    • #11
                      Sorry, your employer offered it - they have to pay it out.
                      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

                      Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

                      Comment


                      • #12
                        Like I said earlier, Any employee effected by this should immeadiately file wage claims against your company with CA-DLSE.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

                        Comment

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