Is it legal for an employer to deny full payment of earned personall time off (PTO) for Exempt employees?
Question Details: My employer has implemented a reduced workweek for most of the employees in the org. due to reduction in business volume. Personal time off (vacation time) is earned and accrued on a weekly basis at a rate commensurate with length of service. I am in the sales department, which is NOT subject to the reduced workweek rules. The company adopted the policy: If you are going to take PTO, the first 2 days are unpaid, the balance of days in any week would be paid. This applies to all departments. If the PTO is "earned" time, can the company legally enforce this policy for earned vacation time?
I think the employer has a real problem with respect to applying the new policy to PTO that was already earned prior to the implemenation of the policy. If you want to discuss further, please contact me at wth@harringtonharrington.com.
Unfortunately, yes--after all, companies don't need to give paid vacation at all. They can therefore set policies on its use, including that it may only be used after taking/using some amount of unpaid time. It's an awful policy in the sense that it is not very fair and will, as soon as the economy picks up and people have more employment options, result in key employees leaving, but the company may do it.
It may also have unintended consequences for the company: for example, as you describe the policy, say you have 4 weeks of earned PTO. If you take them 1 week at a time, you will have to take 8 unpaid days. If you simply disappear for a month, you only take 2 unpaid days while getting the next 18 paid--much more attractive. So this may lead to vacation behavior the company would rather not.
Note: if you have earned days to date, those days can't actually go away--they can, per the above, put strictures on how you use them, but they can't take them.
Note 2: if there are any contracts, those will govern and the company may not change their terms unilterally. Also look at your employee handboo--if the company did not include disclaimers such as "the policies of this handbook do not create enforecable contracts" or "the policies in this handbook may be changed at will," it may be the case that the employee handbook itself creates enforceable terms re: vacations that the company must live by, at least until it amends or changes them.
