I did not want an excellent comment by Jayne Loughrey concerning accrued vacation to be buried in the comments section of an earlier post, so I’ve placed it here (see below).
We expect more details as to benefits – and how Heller management intends to administer them – to be included in the next communication, perhaps on Monday. Check back here at Heller Highwater once the communication goes out and is analyzed by our group of experts. We’re sure to post our thoughts soon after.
“I’m not a labor lawyer, but I do have some personal experience with WARN and employers’ obligation to pay accrued vacation. So, until the labor experts weigh in here, I thought I’d share a few thoughts.
As noted in the site link provided by Anonymous, as a general rule, employers can tell employees when to take vacation. It’s only common sense that on-going businesses need to be able to manage their business in an orderly fashion. What if all the Best Buy sales people wanted to take their vacation the week before Christmas? Employers have to be able to make sure vacations are scheduled to fit the needs of the business. But telling an employee when they can take their vacation is different than telling an employee that he must take a vacation, and it’s really, really different than telling an employee she must take a vacation after sending out WARN lay-off notices.
WARN obligations and accrued vacation/PTO obligations are two separate and distinct employer obligations. I’ve never heard of, and can’t find any authority for an employer trying to diminish its accrued vacation obligations by forcing employees to take vacation during a WARN notice period. The closest thing I could find was an article about how an employer can’t force employees to use their accrued vacation during a temporary shut-down without giving the employee at least nine months notice. The article cited to California Labor Code section 223.3, which states:
“Unless otherwise provided by a collective-bargaining
agreement, whenever a contract of employment or employer policy
provides for paid vacations, and an employee is terminated without
having taken off his vested vacation time, all vested vacation shall
be paid to him as wages at his final rate in accordance with such
contract of employment or employer policy respecting eligibility or
time served; provided, however, that an employment contract or
employer policy shall not provide for forfeiture of vested vacation
time upon termination. The Labor Commissioner or a designated
representative, in the resolution of any dispute with regard to
vested vacation time, shall apply the principles of equity and
Interestingly, this article was written Heller labor lawyers and posted on Heller’s website.http://www.hewm.com/en/news/industry/industry_1103.html
I’ve been mulling it over, but just can’t see how it’s fair or equitable for Heller to force some of the employees who it’s just notified it’s laying-off to use their accrued vacation just so it won’t have to pay them what they’ve accrued, what they’re owed. The WARN act says you have to either give employees 60 days notice of their impending lay-off or, if you want them to leave sooner, you have to pay them 60 days salary (on top of accrued vacation and whatever else they’re owed). The Heller WARN notice told employees there’s work for them and that they’re expected to show up. If Heller doesn’t need or want employees to show up, the fair and equitable thing to do is should pay them their 60 day WARN money and whatever else they’re owed, including accrued vacation. It is not fair and equitable to lower the amount owed and paid to some employees — just those with accrued vacation — by forcing them to to use up their accrued vacation.
I think it’s great that Heller management has acknowledged its WARN obligations, and I’d like to think this business about requiring employees to use up their vacation time is an inadvertent mistake or miscommunication because the idea is not just probably illegal and definitely unfair and inequitable, it’s also just downright cheesy. Putting the squeeze for a few more bucks on some of the loyal employees you’ve just told are going out on the street in two months doesn’t gibe with a genuine concern for your employees.
Of course Heller management could ask employees to voluntarily use up their accrued vacation, leaving it to each employee to decide without fear or pressure whether or not they want to make a contribution to the Heller shareholders capital restoration fund. As was pointed out above, according to the numbers that Larrabie gave out yesterday, Heller’s debt is about $50 million less than its expected accounts receivable collection. At the end of wind-down, after the debts and creditors are paid off, whatever is left presumably gets divvied up among the former partners– where else would it go? Of course I don’t know whether the shareholders will get all their capital and missed draws back, but using the numbers Larrabie gave, and adding in Heller’s other assets, including the value owed to Heller for business taken to other firms, it seems like there should be quite a bit of money for the shareholders. So I’m not sure why any employee would want to give away their accrued vacation, moreover I certainly hope Heller doesn’t descend to a level of weaselry where it tries to force its employees to do so.”