My employer sold the company, do they have to pay out my acured vacation time?

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My employer sold the company, do they have to pay out my acured vacation time?

In January I was due 3 weeks of paid vacation, The company sold about 5 months ago. I was told by the new company that they would not honor our vacation and I needed to talk with former employer. When I talked with them I was told that when you switch jobs you loose your vacation. I told them I did not switch jobs they sold the company to some one else. I want to know, am I entitled to my pay?

Asked on May 23, 2012 under Employment Labor Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

First, the law does not require vacation to be paid out on either termination of employment or on the sale of a company; it is up to each employer to set its own policy in this regard. So if under the policy of your former employer, they would have paid you in this instance, they should have paid you, but otherwise not...and it is unlikely that the former employer had any policy in place requiring payment of vacation when the company was sold.

As for the new company's obligations: it depends on how the business was sold. If the business had been a limited liability company (LLC) or corporation (inc.) AND the new owners bought the LLC or corporation, then your vacation should have carried over. That's because your employer did not change--you were still employed by the same company, just the owner(s) of that company changed. Since your employment continued with the same entity, that entity still owed you whatever vacation days you had accrued or earned prior to the sale.

However, if either the business was not a corporation or LLC, but was instead a sole proprietorship or partnership, or it was a corporation or LLC, but the new owner(s) did not buy the corporation or LLC but instead simply bought the assets of the old business, then the new owners are not obligated to honor your vacation. That's because in this case, they did not buy the legal entity you were working for previously, and you are not working for that entity anymore. Rather, you are working for a new entity or person(s), one that simply happens to have bought everything of value from the old one. Since you truly have a new employer in that case--it's effectively the same as if you were hired by a new company in the same line of work--that new owner is not obligated by what the old business had provided.


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