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  • Illinois

    I work for an international company (3000 employees - 345M in revenues) based in the USA that has field operations throughout the US including California. I live in Illinois and my state as well as others including California have specific labor laws regarding vacation time and how it is interpreted in state labor laws. This company has just rewritten their vacation policy from one that stated that paid vacation time was earned and accrued as the year progressed to the following statement

    "Vacation is provided as a Company benefit and is not earned and does not
    accrue".

    Included with their newly written policy are provisions that allow
    the company to not pay for any unused paid vacation time at the time of
    separation of employment for any reason as well this provision

    "If at the time of separation the employee has taken vacation time which
    exceeds the pro rata portion of eligible time, based on the fraction of the
    year which the employee was actually employed, the value of the excess time
    shall be recoverable by the Company and deducted from the employee's final
    pay check."

    They have purposely changed the specific language of the previous policy for
    the words "earned" and "accrued" to circumvent what most state (at least IL
    and CA) labor laws prohibit corporations from doing - that earned or accrued
    paid vacation time must be paid at time of employment separation. Apparently
    the company's legal department feels that by saying that vacation time does
    not accrue this will release them from the restrictions of these pesky labor laws.
    It seems a contradiction stating that this paid vacation time suddenly does
    not accrue when in fact it still does according to this stated policy

    "vacation time which exceeds the pro rata portion of eligible time, based on
    the fraction of the year which the employee was actually employed, the value
    of the excess time shall be recoverable by the Company and deducted from the employee's final pay check."

    That statement describes an accrual method of calculating paid vacation time in my interpretation.

    So I guess the question is can a corporation suddenly change their stated
    policy that was just rewritten and effective 1-1-06 from saying paid
    vacation time is earned and accrues

    "Vacation is provided as a Company benefit and accrues for all active,
    regular fulltime and part-time* employees each pay period. Employees will be
    credited with full accrual balances on January 1 of each year. In the event
    an employee separates from the company, vacation time taken but not earned
    will be deducted from final pay. Employees will be paid for vacation time
    accrued but not taken upon separation."

    to the following stated policy with the intent of what I can only conclude
    is circumventing state labor laws

    "Vacation is provided as a Company benefit and is not earned and does not
    accrue".

    a.. Effective July 1, 2006, employees who leave the Company, whether
    voluntarily or involuntarily for cause, will not be paid for unused vacation
    time. As of September 1, 2006, employees who separate from the Company for
    any reason, including a reduction in force, will not be paid for unused
    vacation time. If at the time of separation the employee has taken vacation
    time which exceeds the pro rata portion of eligible time, based on the
    fraction of the year which the employee was actually employed, the value of
    the excess time shall be recoverable by the Company and deducted from the
    employee's final pay check."

    I would think that they can't have it both ways - saying paid vacation time
    doesn't accrue but using an accrual method to recoup any amounts paid beyond their fraction of a year formula.

    Just because they have attempted to redefine how they say paid vacation time is awarded (not earned or accrued) state statutes define this for them.

    From the illinois statutes

    "Whenever an employment contract or an employment policy provides for paid vacation earned by length of service, vacation time is earned pro rata as the employee renders service to the employer"

    I believe this a flagrant attempt to side step state labor laws.Any opinions/comments will be appreciated.

    For reference here is a link to California labor law Q & A for vacation
    time.

    California labor law
    Last edited by 1955dave; 07-01-2006, 08:05 PM. Reason: wriong title

  • #2
    If you work in Illinois, Illinois law applies, not California law, so the CA law would be irrelevant in your situation. Illinois law does not unconditionally require accrued, untaken vacation be paid at termination; only if the company policy, agreement, contract, or past practice (which could imply a policy) provides for it. http://www.ilga.gov/commission/jcar/...00B05200R.html

    Illinois law also does not specifically prohibit deducting overtaken vacation from the employee's final pay, as does California.

    The new policy clearly states that untaken vacation will NOT be paid upon termination, so I don't see how you can say that Illinois regulations would still apply. You're free to contact the state DOL for their opinion, though.
    I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

    Comment


    • #3
      Ignoring paid vacation time labor laws

      I referenced California only because this company is applying the policy to all states they have employees in and California is even more specific in their language than Illinois that would prohibit this type of action.

      I can't see how a large corporation plans to steer around this. There is no collective bargaining agreement, the only possible exclusion that is in these paragraphs. The only possible loophole they can plan to exploit is that they have rewrote the policy to specify that vacation time is "not earned and does not accrue". However the administrative code that you referenced defines it for them as being "earned" in this statement.

      "Whenever an employment contract or an employment policy provides for paid vacation earned by length of service, vacation time is earned pro rata as the employee renders service to the employer."

      They can call it whatever they want but if it quacks like a duck.....

      This can be found in the Illinois statutes detailing what the State's law dictates.



      Illinois Statute



      (820 ILCS 115/5) (from Ch. 48, par. 39m‑5)
      Sec. 5. Every employer shall pay the final compensation of separated employees in full, at the time of separation, if possible, but in no case later than the next regularly scheduled payday for such employee. Where such employee requests in writing that his final compensation be paid by check and mailed to him, the employer shall comply with this request.
      Unless otherwise provided in a collective bargaining agreement, whenever a contract of employment or employment policy provides for paid vacations, and an employee resigns or is terminated without having taken all vacation time earned in accordance with such contract of employment or employment policy, the monetary equivalent of all earned vacation shall be paid to him or her as part of his or her final compensation at his or her final rate of pay and no employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation. (Source: P.A. 83‑199.)
      Last edited by 1955dave; 07-02-2006, 09:07 AM. Reason: I'm addicted to Spell Check

      Comment


      • #4
        Originally posted by Pattymd
        Illinois law does not unconditionally require accrued, untaken vacation be paid at termination; only if the company policy, agreement, contract, or past practice (which could imply a policy) provides for it.

        The new policy clearly states that untaken vacation will NOT be paid upon termination, so I don't see how you can say that Illinois regulations would still apply. You're free to contact the state DOL for their opinion, though.
        Just wondering if you were planning to rethink your statement given that it is not consistent with the Illinois law that exists quoted and linked in the above post.

        Comment


        • #5
          Then file a claim with the state DOL. I'm not going to argue with you; it appears you've made up your mind already.
          I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

          Comment


          • #6
            Originally posted by Pattymd
            Then file a claim with the state DOL. I'm not going to argue with you; it appears you've made up your mind already.
            I did not come to this forum looking for an argument and I have not made up my mind about this. That is not why I presented this issue to this forum. I had hoped to receive an informed response from someone who has knowledge of these type of corporate abuses. What I did not expect was to receive an misinformed response from someone who obviously has their bias tilted towards the management side of the table. I had merely asked if you would still stand by your earlier response after reading the actual law that is part of the Illinois Compiled Statutes. The incomplete research you did that stopped at the Administrative Code did not present what the facts are in relation to the law. What this law says leaves no basis for your conclusion.

            Fact 1.

            whenever a contract of employment or employment policy provides for paid vacations, and an employee resigns or is terminated without having taken all vacation time earned in accordance with such contract of employment or employment policy, the monetary equivalent of all earned vacation shall be paid to him or her as part of his or her final compensation at his or her final rate of pay.

            Fact 2.

            no employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation.

            Your false conclusions directly contradict what is stated in this law. I would have expected that being presented with hard facts you might want to reconsider your previous statement. Most reasonable people when presented with convincing evidence will consider what the facts are and reach a decision based on the truth. But as is true with most corporate reasoning you have taken the position of never letting the facts get in the way of a good argument.

            Comment


            • #7
              OK, I'll bite. I'll accept your interpretation.
              I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

              Comment


              • #8
                Dave, this is a volunteer board. The responders here give up their own time, without pay, to answer questions. No one is perfect all the time, I'll wager not even you. If you disagree with a response, fine. If you find support for your position, that's fine too. But demanding that someone come back and acknowledge that you were right and they were wrong, sorry, that doesn't fly with me. Not when they're giving up their own time, without pay, to try to help you.

                Patty may have been mistaken, but in my opinion, you owe her an apology.
                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.

                Comment


                • #9
                  That's OK, cbg, I'll get over it.
                  I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

                  Comment


                  • #10
                    Originally posted by cbg
                    Dave, this is a volunteer board. The responders here give up their own time, without pay, to answer questions. No one is perfect all the time, I'll wager not even you. If you disagree with a response, fine. If you find support for your position, that's fine too. But demanding that someone come back and acknowledge that you were right and they were wrong, sorry, that doesn't fly with me. Not when they're giving up their own time, without pay, to try to help you.

                    Patty may have been mistaken, but in my opinion, you owe her an apology.
                    If I offended anyone I now offer my apology . I wasn't necessarily demanding that Patty admit she was wrong but only consider her statement after being presented with the information that was not available to her previously.

                    What I still hope to encourage is a discussion of how my employer hopes to ignore state labor laws by their use of semantic juggling i.e. paid vacation time is now not earned and does not accrue. Keep in mind that this is a company that has over 3000 employees in 14 countries and almost every state and this policy is being implemented across the board. The company already had to make a special policy for California employees when they changed to their no vacation time carry over rule as that was clearly illegal in that state. This new policy is as well in both that state and mine. So I'm interested in opinions from anyone that not necessarily supports what I feel is right but that would open for debate for this new tactic that corporations may have found for employee give backs.

                    Perhaps this is the wrong forum to continue? Would this be better suited for the labor law forum?

                    Comment


                    • #11
                      You'll get exactly the same people with exactly the same opinions in the labor law forum.

                      The law requires that each employee be subject to the laws of his or her state, period. If you work in Indiana, you are subject to Indiana laws. If you work in Florida, you are subject to Florida laws. If you work in Montana, you are subject to Montana laws. What the law says in California is immaterial unless you are in California.

                      The employer can have 50 different policies, one for each state, and as long as each one conforms to the laws of that particular state, and it would be 100% legal.
                      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.

                      Comment


                      • #12
                        I am aware that states have their own labor laws. The polint that I have tried to make is that this is a policy that has been applied to all states without any consideration for those laws. Is there no one here that thinks that this may seem a bit arrogant and foolish for this company to think they can get away with this?

                        Comment


                        • #13
                          Okay, so suppose you get a collection of us here to say yes, it's foolish for the company to think they can get away with this.

                          Now, what good does that do you? What value does the opinion of some strangers on the internet have for you? What has changed?

                          This board is for providing general legal information. It is not for discussions on foolish employers or for what the laws ought to say.

                          If you think your employer is in violation of your state's laws, you are free to report the violation to the state DOL, as Patty told you in her first response. I frankly don't see what more there is to be said.
                          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.

                          Comment


                          • #14
                            Well, having failed to find a stated purpose that defines what type of forums these are in the FAQ it seems I made the false assumption that they exist for open discussion as the word forum would imply. Apparently I've stumbled into the proverbial Lions Den where I have so far encountered someone from a corporate management background that is one of the primary responders to these groups that not only disseminated the wrong information but felt a need to respond to further discussion with management 101 training. Never acknowledge that you may have made an error and always try to divert the focus from the issue.

                            Now I've being admonished by the moderator that discussion isn't encouraged in these groups even though there would seem to be issues here that qualify for legal questions such as the wording my employer would hope to use to circumvent labor laws.

                            I think I'll just back out of here before I get one of my legs chewed off and search for a more receptive audience.

                            Comment


                            • #15
                              Dave, I simply don't know what you're trying to accomplish here. Perhaps if you could explain what it is you are looking for from us, we could be of more help.We've told you what you can do if your employer is in violation of the law; what more are you asking? We are not a chat room with open discussions, we are a Q&A forum. I'm not trying to chase you off but I simply don't know what you want us to do.
                              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.

                              Comment

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