Last Day Worked or End of Vacation Days

2284103 · June 2006

We have a company bonus system that pays at the end of every quarter. It is not guaranteed but we have never had a quarter when we didn't pay out bonuses since we started. One rule of qualification is that the ee must be employed in good standing at the end of the quarter.
We have an ee who has been a very good ee for several years. He is moving to another state and his last day is 6/23. He has enough vacation time to use it to carry him through the end of the quarter and expects his bonus. We will consider his term date as of the 23rd for COBRA, etc. Since an ee is technically "employed" while on vacation, do we need to pay his bonus for the quarter?

Paul in Cannon Beach · June 2006

Are you asking if you are obligated to pay or should you pay?

Did the ee cash out unused vacation pay when he left? If not, I would say that his last working day was the 23rd but that he was still employed and thus eligible for the bonus.

He was a good employee for several years. Why nickel and dime him on his way out.

Give him the bonus, wish him well, and ask him to tell others what a great place to work your organization is.

WT · June 2006

When employees leave, they often have accruals on the books of paid vacation or personal leave. The usual practice is to pay these out in the final check and not run them out a day at a time until exhausted.

However, in this case, you are free to do as you wish. Do so, and try to be consistent with employees who leave in the future.

2284103 · June 2006

Thank you for the comments. I guess I just needed someone else to say what I was thinking. We will pay him his bonus. Since we don't have it clearly stated in either our handbook or our bonus qualifications, we will do that so managers will not have a gray area next time.
Thanks again.

Open1 · June 2006

You might want to add that employees must give minimum 2 weeks' notice in order to be eligible for the bonus if the quarter ends on a vacation day and they don't return to work. x}>

E Wart · June 2006

You probably have some policy that states the employee's term date is his last day at work. He cannot extend his term date by vacation/time off. This is normal because you don't want to continue paying for employees group insurance after they leave (plus the liability of any medical/life claims if no longer an employee.) This normally is also set up in your Group Medical and Life policies (which should coordiante with your company term date policy). However, it looks like to me your bonus plan is discretionary and you can actually award it whenever you wish, to whomever you wish. If you want to keep the "bonus policy" flexible so that you can make "exceptions", I would leave it this way and not set up "restrictions".
I agree, if you have a good employee who is moving (you never said why he is moving which may make no difference). He worked almost the entire quarter, and he left on good terms. I would pay him the bonus, thank him for his contributions, and wish him good luck. (If he moved back in town, wouldn't you want him to reapply to work with your company?)I wouldn't think anyone else with the company needs to know who gets bonuses and how much they are. (One other thing is to watch out with payroll and don't actually "send through" his termiantion until the bonus is processed. You don't have to pay him during this period, but just don't take him out of the system. Or, it could cause much confusion.)
E Wart

Last Day Worked or End of Vacation Days

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