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Question about change in vacation policy Massachusetts

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  • Question about change in vacation policy Massachusetts

    I've been with the company for 5+ years. Small company (100 people). Existing policy on vacation time has been unlimited accrual and unlimited carryover year to year. Thus I currently have about 20 days vacation time accrued.

    I come to find out today (in a round about way, later verified) that the company has instituted a new policy limiting carry-over year to year to only 5 days. The new policy is already in effect, as new employees in the last few months have been told this. Only they haven't told the older employees yet, because they haven't "decided how to handle it".

    Now, I'm in great standing with the company, and I don't foresee any issues working this out - but I am curious as to what they can and cannot legally do here.

    Based on the new policy, there are approximately 15 days of my vacation time in question for me as of December 31st. (20 in the bank minus 5 carry over days) That is only 6 weeks away, and my role in the company is definitely not one that allows me to just take 3 of the next 6 weeks off. Even if it did, given that I still have not formally been told about this, it seems a bit of "short notice" to me.

    So I guess my questions are:
    a) can they in any way take away vacation time I have already accrued under the policy of the last 5+ years?
    b) can they just up and change the policy and tell me to either take it or lose it in such a short time frame as the next 6 weeks (or less if they don't formally tell me for another couple of weeks)?
    c) in a policy change like this, do they have to let me keep carrying over my time accrued under the old policy (or be forced to pay it out if they don't want to carry it over?)

    Myself and a few other of the most valuable employees in the company are in this same boat - so my hunch is this will work itself out in a copasetic way. But still, it never hurts to be informed just in case it hits the fan.

    Any thoughts are greatly appreciated. Thanks!

  • #2
    You have hit upon a point on which MA law is in conflict with itself.

    The answers to your questions, based on my many conversations with Tom Reilly's office over the last several years, are:

    1.) No
    2.) Yes
    3.) Maybe

    To take the easy question first, #2, an employer absolutely has the right to change their vacation policy going forward. They also absolutely have the right to tell you when you can (or must) take your vacation. There is nothing anywhere in MA law that would even question the employer's rights to change their policy, or to tell you that you must take 15 days within the next six weeks. That is beyond question.

    The rest gets a bit murkier. MA law considers earned vacation time to be wages. As such, in answer to a direct question, "Are there any circumstances under which an employee can lose vacation already earned?" I received a direct answer, "No." (direct quotes in both Q & A).

    However, several years ago, Reilly's office (or it may have been Scott Harshbarger's office - I'm not 100% certain at this moment how long ago it was) the MA DOL (which is a part of the AG's office) issued an opinion letter. I'm not where I can easily give a link to it; perhaps someone else will. But the opinion letter stated that an employee who had been given sufficient time to use their vacation (example given; 2006 vacation must be used by March 31, 2007) and had not, could be subject to a use it or lose it policy. When I asked for a definition of a use it or lose it policy, they told me (again, this is Reilly's office) that an employer could "cap" the amount of time an employee received and if they hadn't used the time they had by such and such a date, they would receive no more until they did.

    Now, I don't have a quarrel with that kind of policy, and it does not violate my understanding of MA law. (BTW, I was not looking to deprive employees of their vacation; I was looking for proof to supply my boss (in a state where use it or lose it policies ARE legal) that the policy she wanted to establish was illegal in MA.) However, that is not what the general HR population understands to be a use it or lose it policy. What's more, it runs counter to the wording of the opinion letter, which seems to be saying very clearly that time not used by the date provided, could be lost. I never received a clear explanation of how the opinion letter does not violate the concept that earned time is wages which cannot be lost.

    I don't have a definite answer for you, sorry. My husband has business connections with Martha Coakley and has promised me that once she takes office and has had enough time to get up to speed, he will get me an audience with her to get some clarifications on this and other MA law (or at least make her aware of the need for clarifications). But until then, all I can do is make you aware of the conflict and direct you to the MA Fair Employment Hotline (I'm out of town and don't have the number with me - check the blue pages of the Boston phone book) to answer any specific questions about the policy in question. I do not promise you that the answers will be consistant with what I have told you, or with what they themselves tell you.

    When Phil comes by he may have some more words of wisdom for you. He has a knack for finding obscure pieces of law that clarifies the situation. Hopefully he'll have a rabbit in his hat for you. I wish I did.

    Good luck!
    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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