Vacation Pay Changes May be Improper

by Don D. Sessions
Employee Rights Attorney
Mission Viejo, California

Originally Published in The Orange County Register, February 12, 2001

Q: Our employee handbook states, "To receive holiday pay, an eligible employee must work the regularly scheduled workdays immediately before and after the holiday, unless the employee has received prior authorization to miss work."

I received prior written authorization from my manager to take off the Monday after the Thanksgiving holiday. I believed I would still get paid for Thursday and Friday, but not for Monday.

I did not get paid for any of the days, allegedly due to "previous practice," of which I was never informed.

Am I entitled to holiday pay since I followed the written rules? Can you explain "previous practice"?

A: "Your employer has a responsibility to comply with its promises, such as the conditions to receive holiday pay set forth in the employee handbook," says employee rights attorney Don Sessions, Don D. Sessions Law Corp., Mission Viejo.

"They may try to allege that the employee handbook is simply a ‘guideline’ and not a contractual commitment.

"Look for other limitations in the handbook which might justify changing the policy unilaterally or basing it on ‘previous practice,’ and look for any definition of ‘prior authorization.’

"Were these requirements of format or timeliness? If you did not comply, you might not qualify for the vacation pay.

"You are probably entitled to holiday pay if you followed the written rules. The ‘previous practice’ probably would not apply if they did not inform you of it. After all, you relied on their other written promises.

"Complain in writing to make a record of your complaint.

"You certainly have the right to fight for your vacation pay but decide if possibly losing your job or jeopardizing your job security is worth it.

"If not, save your claim for later if you decide to quit or for a time when they might fire you."

"Some employers even regard the date of your last severance payment as your final day of employment, even though you might have stopped working long before.

"You improve your chances of receiving unemployment compensation sooner if you take the severance pay all at once. Your case would be even stronger if part of the severance amount is for non wage items, such as compensation in exchange for your agreement to waive claims you might have against the company for discrimination or other issues.

"By receiving a lump sum payment, you avoid the possibility that the company might stop payments prematurely because of financial problems. An immediate payment also provides money for your own financial needs, such as investing in further education or a job search.

"There are some advantages to stretching out severance payments, however. Your tax burden might be less if the payments are extended into another tax year. Your health insurance or pension plan contributions also might be continued for the duration of your severance payments.

"You should consult with your attorney before negotiating the terms of any substantial severance pay arrangements, especially if your employer also seeks a release of your rights."

For questions, call (800) 774-7494 or access job-law.com. © Sessions & Kimball LLP.