Best Ohio Wage Attorney Answer: What if I have unused vacation time and I get fired – does my boss have to pay me for that time? If I quit, do I get paid for pay unused vacation time? Are use-it-or-lose-it vacation policies legal?
There are all sorts of reasons why employees have come in and told us, “I was wrongfully terminated from my job.” But many employees have one thing in common: after they were fired, they did not get paid for their unused vacation days. In fact, lots of people call regarding that issue alone, and they are not even disputing whether their termination was wrongful. So what’s the deal with unused vacation days or paid time off (PTO)?
As our wage and hour lawyers have blogged before about remaining PTO, Ohio law has a default and then exceptions. In Condron v. The City of Willoughby Hills, the Eleventh District Court of Appeals explained the default laws in Ohio: “vacation pay is not a gift or gratuity, but rather a deferred payment of an earned benefit and an employer can no more withhold the accrued vacation pay than, for example, it could hold the last pay check the employee earned but not received.”
Sounds good right? But, don’t get too happy until you understand the exceptions. Your employer is allowed to put conditions on the PTO, including how you accrue vacation time or PTO, requiring a particular amount of time worked before you get are provided vacation time, forfeiture of PTO at the end of a year, forfeiture of PTO is you are terminated from your job for cause, forfeiture of vacation time if you quit, and even forfeiture of PTO is your employment ends for any reason. Well, that sucks. However, the good news is that your employer has to but these wage/PTO limitation or exceptions in writing as part of a policy.
In Ervin v. Oak Ridge Treatment Center, the Fourth District Court of Appeals of Ohio addressed the exceptions:
Oak Ridge’s policy concerning payment of PTO to employees who resign or are terminated appears in the employee handbook PTO provision entitled “Resignation/ Termination”, which states:
Upon resignation/termination from the company, an employee will not be paid for any unused and accrued time in the PTO account. [Emphasis in original.] …
The plain language of the PTO policy’s “Resignation/Termination” provision unequivocally precludes payment of PTO to employees upon termination of their employment. Hence, based on the PTO policy’s clear terms, an employee could not have a reasonable expectation of being entitled to PTO payment upon termination. … when Oak Ridge did give PTO to its employees, it could establish the rules under which employees could receive the PTO. …
Indeed, Ohio courts have enforced company policies that restrict or preclude payment for personal or vacation time upon termination of employment where, as here, the policies are clear and published in an employee handbook. …
So, how do you know if you are entitled to a payout on PTO at the end of your employment? First, check your policy and procedures manual. If your employer has a policy saying that vacation is paid out upon the termination of the employment relationship, then he has to abide by that policy. That’s true whether you were fired, or whether you left of your own accord.
However, most employers institute use-it-or-lose-it vacation policies. Typically these policies require that you use your vacation by a certain date – often the end of the year – or else you lose the vacation days. These policies are especially awful because even if your boss won’t let you use a vacation day that you’ve requested, he still isn’t obligated to pay out that day – or any unused day – if you haven’t used it by the end of the specified period.
Does this still feel wrong to you? Some states agree. Courts in California, for example have adopted the argument for illegality that runs like this: use-it-or-lose-it vacation policies violate wage laws because they effectively deprive employees of earned wages. The main case is called Molina v. Lexmark International, Inc., and it was decided in September of 2013. In this case, Lexmark’s use-it-or-lose-it policy was declared a violation of California’s labor laws. The Court allowed the suit to proceed as a class action, and it allowed Lexmark employees to seek damages related to years and years worth of lost vacation wages. As a result, Lexmark’s illegal policy cost it millions of dollars.
Here in Ohio courts aren’t quite as pro-employee as those in California when it comes to use-it-or-lose-it vacation policies. Unlike in California, where employers are actually barred from instituting use-it-or-lose-it policies, here in Ohio those are valid. However, vacation must be paid out at the termination of the employment relationship if the policy is silent on the matter. So unless the policy specifically states that if you get fired or if you quit you will NOT be paid for your unused vacation time, then your employer owes you any vacation days you have earned. See Fridrich v. Seuffert Construction Co.
Did your boss refuse to pay you for your unused vacation days after you quit, or were fired? If so, the best course of action is to call the right attorney at 866-797-6040 to schedule a free and confidential consultation. At Spitz, The Employee’s Law Firm, you will meet with an employment lawyer who will be able to tell you what your legal rights are and the best way to protect them.
If you believe that your employer is not paying you all of your wages, paying you less than minimum wage, unlawfully deducting money from your paycheck, not paying you time and a half for overtime, denying you your PTO, or is otherwise cheating you out of wages requires contact the minimum wage violation lawyers and overtime claim attorneys at Spitz, The Employee’s Law Firm today for a free and confidential initial consultation. You may have a claim under the Federal Fair Labor Standards Act or Ohio Fair Labor Standards Act. The wage and hour lawyers at Spitz, The Employee’s Law Firm will provide you with the best options for your wage and hour pay dispute situation. If you even think that you may be entitled to overtime pay that you are not being paid, call 866-797-6040.
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