Alabama State Leave Laws - Abstract
Presented as Public Domain
?Vacation Leave
https://www.employmentlawhandbook.com/leave-laws/state-leave-laws/alabama/
In Alabama, employers are not required to provide employees with vacation leave, either paid or unpaid. If an employer chooses to provide vacation leave, it must comply with the terms of its established policy or employment contract. See Amoco Fabrics and Fibers Co. v. Hilson, 669 So.2d 832 (Ala. Sup. Ct. 1995); ISS International Service Systems v. Alabama Motor Express, 686 So.2d 1184 (Ala. App. 1996).
An employer may lawfully establish a policy or enter into a contract disqualifying employees from payment of accrued vacation upon separation from employment, whether by quit, discharge, or layoff.
An employer may also lawfully establish a policy or enter into a contract disqualifying employees from payment of accrued vacation upon separation from employment if they fail to comply with specific requirements, such as giving a two week notice or being employed as of a specific date of the year. See ISS International Service Systems v. Alabama Motor Express, 686 So.2d 1184 (Ala. App. 1996).
An employer is required to pay accrued vacation to an employee upon separation from employment if its policy or contract requires it. See Amoco Fabrics and Fibers Co. v. Hilson, 669 So.2d 832 (Ala. Sup. Ct. 1995); ISS International Service Systems v. Alabama Motor Express, 686 So.2d 1184 (Ala. App. 1996).
Is My Employer Required to Pay Me for Vacation or Sick Days When I End My Employment?
Generally speaking, there is no law that requires a private employer to compensate an employee for accrued vacation days when their employment ends. In fact, there is no law that requires an employer to even provide that leave time, either paid or unpaid. Nonetheless, most employers offer paid leave days to some extent.
A Promise is a Promise
Once an employer decides to offer paid leave days, they may be legally bound to provide those days. Alabama courts have ruled that, in certain situations, an employer's assurance of paid vacation time may constitute an implied contract that is enforceable. This is true regardless of whether the promise is made in an employee handbook, or made verbally to the employee.
When Vacation Pay Is Due at Termination
In the case of Amoco Fabrics v. Hilson et al., 669 So. 2d 832 (Ala. 1995), the Alabama Supreme Court held that offered vacation time is considered a form of compensation for services. Once the services are rendered, the right to the promised compensation is vested just as are wages or other forms of compensation. The reasoning is that, once it is communicated to employees, an employer cannot unilaterally "revoke [its] vacation pay policy once the employees have performed." If an employer in Alabama does not want to pay their employees for accrued but unused vacation time, they must say so specifically, in advance.
Company Policies Are in Control
The other side of this coin is that, an employer may lawfully establish a policy that disqualifies an employee from payment of accrued vacation upon separation from employment, if they fail to comply with specific requirements, such as giving two weeks' notice, as was the case in ISS International Service Systems v. Alabama Motor Express, 686 So.2d 1184 (Ala. App. 1996).
Alabama Vacations: What you need to know
https://www.blr.com/Compensation/Benefits-Leave/Vacations-in-Alabama
In most states, private sector employers are not required to provide vacation, whether paid or unpaid, to employees. Therefore, employers have significant discretion in developing vacation and personal leave policies that best fit the needs of their workplace and employees.
If promised, vacation must be granted. Nonetheless, it is important for employers to understand that, if their practices, policies, or statements rise to the level of creating a “promise” of vacation, then the employer may create a binding legal obligation to provide vacation—even when state law would not otherwise require it to do so.
Even where state law does not specifically require employers to pay out accrued vacation upon termination, a consistent practice, written policy, or contract promising such payment may create an enforceable legal obligation to do so. In such circumstances, earned vacation will generally be treated as wages pursuant to state wage payment and collection laws.
The Court of Appeals in Alabama has ruled that offered vacation time is a form of compensation for services and that once the services are rendered, the right to the promised compensation is vested just as are wages or other forms of compensation.
If it is communicated to employees, an employer may not unilaterally “revoke [its] vacation pay policy once the employees have performed.” Alabama employers that do not wish to pay their employees for accrued but unused vacation must say so specifically and beforehand.
To be safe, employers should put their policy in writing and distribute it to all employees.
Withholding paid time off from final paycheck: an expensive mistake
Most employers provide employees with some form of paid time off. What happens when an employee with accrued leave time resigns from employment? Do you have to pay her for that time?
What happened
Yolanda Davis was employed as a nurse by St. Francisville Country Manor, LLC (SFCM), a nursing home facility. Under SFCM's policy, employees who completed a probationary period and worked at least 35 hours per week were entitled to 10 paid days off (PDOs) annually, which accrued at the rate of 3.333 hours per pay period. SFCM's policy also stated that PDOs were provided in lieu of vacation or holidays, so if an employee wanted to take off Christmas Day and be paid, she would have to use a PDO. Additionally, the policy stated, "If you quit without proper notice[,] you forfeit this benefit."
Davis signed a letter of resignation and left SFCM. A few days later, she received her final paycheck in the amount of $347.14.
She contended her final paycheck failed to account for her unpaid PDOs. When SFCM refused her demand for payment, she filed suit, alleging it failed to pay her $1,008 in accrued and earned PDOs. She sought payment of the unpaid "wages" plus 90 days of penalty wages, attorneys' fees, and court costs under Louisiana's final paycheck law, La.R.S. 23:631, 632.
First you win, then you lose
The trial court ruled in favor of SFCM, finding that the PDOs weren't "wages" or "vacation pay" for which compensation was owed and that SFCM's policy specifically provided that PDOs aren't paid to employees who quit without proper notice.
The employer's victory was short-lived, however, as Davis found a more favorable audience in the court of appeal, which reversed the trial court's ruling and awarded Davis her PDOs plus an additional 90 days of pay as penalty wages, attorneys' fees, and court costs.
The court of appeal first observed that La.R.S. 23:631(A) (1)(b) provides that upon the resignation of an employee, the employer is required to pay her "the amount then due under the terms of employment" on or before the earlier of the next regular payday or 15 days following her resignation. According to the court of appeal, the "amount then due under the terms of employment" includes all wages and other compensation earned by the employee during her employment.
Thus, the first issue before the appeals court was whether the compensation Davis sought for her accumulated, unused PDOs was a gratuitous benefit for which no compensation would be due or an "amount due under the terms of employment," which would trigger compensation.
The court explained that vacation benefits fall under the statute as an "amount due under the terms of employment" unless the employer has "a clear, written policy establishing that the vacation time granted is nothing more than a mere gratuity and [is] not to be considered an amount due or a wage."
The court then turned to La.R.S. 23:631(D), which addresses payment for accrued vacation time, stating vacation will be considered an amount due if, in accordance with the employer's policy, the employee is eligible for and has accrued the right to take vacation time and has not been otherwise compensated for the time.
Thus, accrued paid time off constitutes wages earned under the statute and isn't a mere gratuity or an illusory promise. Moreover, while the right to enjoy paid annual leave is prospective, it becomes an employee's vested right when it is earned. Accordingly, the court ruled that Davis' unused PDOs were a compensable "amount due under the terms of employment."
Paid time off/payed day off is earned compensation, whatever the label
Recognizing that any purported distinction between "PDOs" and "vacation time with pay" is mere semantics, the court determined that an employee's right to compensation vests when the PDOs accrue in accordance with the terms of the employer's policy. No matter the label, the right to be compensated vests when the employee accrues the paid time off.
Accordingly, the court ruled that "accrued but unused vacation time is a vested right for which an employee must be compensated or paid upon discharge or resignation." Since SFCM's policy didn't clearly establish that PDOs were a gift or donation but rather provided that all employees who completed their probationary period and worked at least 35 hours per week earned PDOs at the rate of 3.333 hours per payroll period, Davis was entitled to the compensation she sought.
Bottom line
It's hard to imagine an employer policy under which vacation or paid time off could be considered a mere gratuity or gift and not earned compensation. Such a policy would have to provide that employees don't earn or accrue vacation or paid time off but that vacation or paid time off is granted in the sole discretion of the employer and therefore employees should have no expectation of being allowed any time off work with pay unless authorized on an ad hoc or case-by-case basis by the employer.
Such a policy or practice obviously would invite inconsistent application and open the door for discrimination claims if employees are granted unequal, albeit discretionary, benefits. However, if your policy states that employees receive, accrue, or are awarded a certain amount of vacation or paid time off corresponding to a period of service, the vacation or paid time off will be considered earned compensation even if you try to call it a gratuity.
Thus, if your employees receive a certain number of hours, days, or weeks of vacation or paid time off per year or accrue a certain amount of vacation or paid time off per pay period, month, or year worked, the vacation or paid time off is earned by your employees and constitutes wages that can't be forfeited.
You are on the hook to compensate your employees for all unused earned or accrued vacation or paid time off upon resignation or termination. As the employer in this case learned the hard way, the failure to include unused vacation or paid time off in an employee's final paycheck carries a stiff penalty.
Change in PTO Policy
https://www.humanresourceblog.com/2011/03/31/change-in-pto-policy/
We used to offer staff 13 days of PTO accrued at a 4 hour rate per pay period. They had an option to roll PTO in excessive of 24 hours over to the next year, or be paid the PTO over 24 hours at the end of the year. (You had to roll a minimum of 24 hours over to cover absences at the beginning of the year.)
Last summer we froze the ability to give new staff PTO as we were rapidly expanding and the cost was becoming significant. Staff that did get this benefit were “grandfathered” in and did not lose it.
The executives would now like to remove PTO from hourly staff and only allow salaried-exempt staff to accrue at a lower rate based on time in the company.
Since it is mid-year how do we go about this transition? Do we pay out unused PTO for the hourly staff now? Or at the end of the year? Do we “pro-rate” PTO for salaried-exempt staff to avoid a payout or do we pay them what was accrued and adjust them to zero and start fresh? And suggestion for how to proceed would be great! (Oregon)
The best practice would be to inform all employees, in writing, of the new policy one full pay period before it goes into effect. (A few states would require more notice to employees.)
The best practice would be to allow hourly employees until the end of the year to use the PTO they have already accrued, even though they are not earning any more. You could certainly pay them for the unused PTO on a specific date instead, but that would be a significant payroll expense to the company all at once. By allowing employees 9 months to use the accrued PTO, you spread the expense over a longer period.
It is not clear what you propose to prorate for exempt employees. Presumably, they would keep the PTO already earned, with the ability to use it until the end of the year. Suppose you implement this policy on April 15. Exempt employee John has 10 days of PTO. John still has his 10 days of earned PTO and can use them until Dec. 31, 2011.
Eliminating accrual of PTO for hourly employees and reducing the amount accrued for exempt employees is restrictive enough, without taking away PTO that has already been earned. In some states you would be required to pay the employees for any earned PTO they lost. In any state, employee morale will plummet and performance suffer if you deprive employees of PTO they have already earned.
Consider for a moment how your non-exempt employees will feel if you do not handle this properly. One day Doris, an hourly employee who has been with you for 10 years, has 10 days of PTO. The next day, she will have none. Doris will rightfully feel that you have “taken her PTO.”
One way to avoid this would be to implement the change in two steps. For example on April 15, exempt employees and hourly employees would no longer earn PTO, although they would have until the end of the year to use PTO they have already accrued.
Of course, making this change at all sends a message that the company is elitist and does not value the employees who are actually performing the work.
Questions.
What is the maximum PTO that can be accrued and rolled over to the next year
When was the HR Manual rescinded
Was it replaced
When was the PTO Policy rescinded for Exempt employees
Was it done in writing
Did everyone know
Are all salaried and unsalaried employees treated the same
Is there a record of days taken off in lieu of PTO
Has anyone been refused to take PTO or intimidated for trying to take time off
What are the normal hours worked by someone salaried
Are non-exempt employees still getting their PTO and able to be paid upon leaving (with 2-day notice). What policy covers that
Has an exempt employee been paid PTO since the policy change
Looking for a second company I can grow with
1 年I got fired yesterday. Right after I already worked the entire day. They waited until 5 minutes before I was getting off to let me know. When I asked why I was being let go they told me not to worry about it but that I just wasn't working out. I've never been fired from a job EVER. I've never been wrote up or got in trouble at any job either including that job. It's crazy to me because I get along with everyone and my bosses tell me all the time how good of a worker I am and how great I'm doing but all of a sudden I'm not a good fit and they won't give me a reason why. Anyways they are refusing to pay me out for my leftover PTO and vacation time. Is that legal? What should I do??