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Vacation Policy Discrepancy

Our company has a vacation policy. To have two weeks vacation, you must be there for 3 full years. So, if you were hired in March, 2014, you would not get two weeks until 2018. One manager allowed his employee to have the two weeks vacation after two years and four months. This employee was hired in August 2015. By the policy, she should not get two weeks vacation until 2019. Is it legal to allow that employee to have the two weeks vacation sooner than what policy states? Would that discrepancy survive an HR or payroll audit? Could the employee that abided by the policy seek compensation or lawsuit? If it’s legal, how does HR explain this to the employees that abide by policy?

There is no federal law regulating vacation policies for private employers. Some states have adopted such laws. Of those states, most simply require employers to abide by the terms of their own established practices and policies. Other states provide more protections to employees by prohibiting use-it-or-lose-it policies and/or considering accrued vacation time to be equivalent to earned wages. Absent state law or employment contract, employers are free to adopt vacation policies at their discretion, of course without discriminatory practice towards any protected class.

Allowing an employee to take vacation prior to actually earning it in accordance with company policy in itself is not illegal. Even if a state law exists that requires employers to comply with their own policy terms, an unlawful act would be the employer not allowing an employee to take vacation who has met the eligibility requirements per the policy.

Considering only one employee was granted vacation time prior to being eligible for it shows that the supervisor made a one-time decision for one employee. Now, if the supervisor allowed all employees to take vacation time prior to meeting eligibility criteria but refused to allow one employee to do so presumably due to discrimination then that employee would most likely have grounds for a discrimination claim.

Whether the supervisor’s actions would come to light in a Payroll or HR audit completely depend on the audit being conducted. Most Payroll/HR audits focus on catching administrative mishaps (i.e. paying an employee incorrectly, missing information/ppw). But, if an audit was specifically run to review vacation time and eligibility criteria, then the issue should’ve been caught.

What was the reasoning for the supervisor allowing the employee to take vacation prior to being eligible for it? Was he unaware of the policy? Did he miscalculate her eligibility date? Did the employee have an emergency situation that he decided was worth making an exception to the policy? Or was he exhibiting blatant favoritism for the employee?

All of these factors have weight in the appropriateness of his decision and how to manage the communication to other employees who have been required to abide by the policy. If other employees are questioning why this particular employee was allowed to take vacation it’s probably best for HR to state that the situation is a private manner and all employees are expected to adhere to the vacation policy.


This entry was posted on Wednesday, October 11th, 2017 at 12:52 pm and is filed under
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