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Federal, State Provisions on Vacation-Time Pay Vary

April 11, 1999

Q: I began working for my employer Oct. 22, 1996. When I left Sept. 18, 1998, I was told that I was not entitled to any vacation pay from Oct. 22, 1997, to my departure date because I had not completed a full year. The company told me that their plan was governed by federal law (ERISA) and that state laws would not apply. The company's manual states that employees accrue vacation benefits only after completing each year of service, that no benefits are earned for partial years of service. The amount of vacation money that I have lost is quite substantial.

--P.C., Aliso Viejo

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A: An employer is not required to provide vacation pay. However, if there is a vacation policy, the company needs to follow appropriate law in implementing it.

In California, most employers who provide vacation pay and terminate an employee before that employee has fully used his or her vested vacation time must pay all of that vacation on the date of termination.

Even though the employer might try to restrict the use of the vacation until a certain time period has passed, a pro rata portion of that vacation should be paid if the employment is terminated before that date.

But state law would not cover vacation terms in a union agreement or a funded vacation plan established under the federal Employee Retirement Income Security Act of 1974. These plans can designate vacation terms other than those established by state law.

You should check to make sure that your former employer's vacation plan actually was established under ERISA.

Ask for some proof that the company really is governed by federal law, such as a copy of the document. Then you could have an attorney or an advisor at the California labor commissioner's office give you an opinion.

--Don D. Sessions

Employee rights attorney

Mission Viejo

1st Step Should Be Choosing a Path

Q: I am 43, have a master's and a law degree, the latter from a small private law school. I passed the California bar exam on my first attempt and was admitted to the bar in 1994. I have been working in physical therapy for the last 15 years, and have not had the opportunity to practice law. The company I work for laid off most of its therapists, including me.

I believe that I should be able to find a good job with the opportunity for advancement. However, I do not know what type of company or industry I should be looking at. What types of industries employ people who have the analytical and writing abilities to make it through law school and pass the bar examination?

--M.M., Los Angeles

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A: I think you have made a pretty good case for yourself. You obviously are smart and able to learn. So many employers are looking for bright, dedicated workers that it is difficult to cite specific industries.

You need to put together a good resume and "pound the pavement." You also need to decide whether you want to pursue a legal career or other opportunities. A search for entry-level management positions may be one alternative.

The key is getting your foot in the door, then using those entry positions as steppingstones.

Keep exploring opportunities to move up and don't get stuck in a "dead-end job."

With your potential, I can't imagine you won't eventually get where you want to be. Perseverance and hard work are the keys.

--Ron Riggio, director

Kravis Leadership Institute

Claremont McKenna College

Unequal Benefits Under the Law

Q: My employer gives benefits such as health insurance to salaried employees but not to hourly employees. Is this lawful?

--J.K., Palmdale

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A: An employer may choose to provide benefits or not to classes of employees so long as the employees are not excluded based on prohibited criteria such as race, age, gender, etc. Many employers provide different levels of benefits for management and non-management, or exempt and nonexempt employees.

--James J. McDonald Jr.

Attorney, Fisher & Phillips

Labor law instructor, UC Irvine

Employer Sets Length of Coverage

Q: My son received notice from his employer that his health coverage expired on the last day of his employment. It was my impression that he would be covered for one month after his last work day. He was employed for two years.

--B.M., Glendora

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A: The length of period that your son was employed has no effect on how long his health insurance coverage continues following termination of employment. The employer, after consulting with its insurance company, determines the length of coverage after termination.

--Kirk F. Maldonado

Employee benefits attorney

Riordan & McKinzie

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