What to do if my employer sold his company and is denying all workers earned sick pay?

UPDATED: Oct 1, 2022

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What to do if my employer sold his company and is denying all workers earned sick pay?

I work at a hamburger chain franchise to pay for my college. The previous owner recently sold his 3 stores. Upon leaving, he told all of us that he was not responsible for our sick time; most of us had the full 40 hours of paid sick time but that the new owners would be responsible for the PST. The new owners set all of our sick time back to zero, and many of us feel as though we are still entitled to all the money and time we earned under the former owner’s name.

Asked on July 6, 2018 under Employment Labor Law, Arizona


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

There is no inherent right to be paid out for sick time: when a company is sold, the workers are NOT entitled to be paid for accrued but unused sick time. They would only be entitled to it if they'd had a written contract guarantying a payout in this circumstance: sick time is only paid out when there is a contract.
If the company had been an LLC or corporation and the new owner bought the LLC or corporation itself, so that you are still working for the same business entity (same LLC or corporation), just with a different person owning it, you would still have any accumulated sick days to use--you are still working for the same employer, just that the employer itself has a new owner. But if the business you are no working for is NOT the same LLC or corporation (e.g. the "assets" of the business, but not any business structure, were purchased), then the new owner is not obligated to carry over your sick time--you effectively have a new job, working for a new company, and that company doesn't have to honor what you had with your last employer.

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