Alternative to paying out employee accured vacation time when employee leaves company (California)

albalynn

Morning,

How do California companies deal with paying employee accured vacation time? Are there any alternatives vs. paying/cutting the employee a check when the employee leaves the company?

Thanks!

Gillian

There is a one word answer to your question - no.

Theresa Gegen TX

Most companies in California will have maximum accrual policy. California will not allow a use it or lose it policy, but you can have a company policy where by the employees can only accrue up to X amount of PTO. This encourges the employees to use their PTO, and the companies will not get hit with someone having 1 year or six months accrued.

Good Luck!

Don D

Gillian: You certainly know better than to suggest, with an attorney in the audience, that there is any such thing as a "One Word Answer"!

Gillian

Actually, I was a little hasty on my one word response. There is one alternative. A company can create a defined benefit plan, create a Vacation Trust Fund, fund the plan then pay vacation benefits from the fund. This places vacation practices subject to the provisions of the plan and under the jurisdiction of ERISA, not the state labor code. I know of only one company that actually does this.

albalynn

>Actually, I was a little hasty on my one word response. There is one
>alternative. A company can create a defined benefit plan, create a
>Vacation Trust Fund, fund the plan then pay vacation benefits from the
>fund. This places vacation practices subject to the provisions of the
>plan and under the jurisdiction of ERISA, not the state labor code. I
>know of only one company that actually does this.


What company uses this method? I'm not trying to get out of paying the employee, I don't want to face penalties. I just wanted to be aware of any alternatives. Thanks.

Gillian

I will find out, but can't until next Wednesday night. The issue came up in a class I was teaching and one of the students said that her mother worked for a company that had an ERISA plan.

albalynn

I will wait until then. I've been searching everywhere for information on this issue and nothing has come up. Thanks for all your help.

Gillian

I mixed up classes. The next time I meet with this group is a week from Saturday. If you can't wait that long talk to a labor attorney and ask about a vacation trust program.

albalynn

Gillian, can your reccommend a good website explaining the vacation trust program.

Gillian

No, but I'll ask around. If I can't find anything, be back on March 10. If I do, will be back earlier.

albalynn

No problem, you've helped me a great deal.

Gillian

As promised, here I am on the 10th. The employer who has an ERISA vacation plan is British Petroleum West Coast Products. Their headquarters are in Chicago, but you can probably find a California HR group which can help you. Other names which you might use are BP or Arco Stations. The fact that the headquarters is in Chicago will have no bearing on the California Labor Codes which require accrued vacation pay to be paid even though not used.

Pork

Gillian: Your are a "super duper trooper" just like "Dandy Don", I liked your first one word answer and I started to post it myself and then read more and you closed it out without me showing my old "dawg tricks". I also thought about this being a California posting and hesitated just a moment and there you were with the 1st post in response. May you have another Blessed day as your reward! Pork

Gillian

Thanks. When I saw that there was an additional response to this question, I figured that it was Albalynn. Other than San Diego, I don't where she is.