Results 1 to 6 of 6
  1. #1
    Join Date
    Apr 2017
    Posts
    12

    Default Does Vacation Time Carry Over to a Successor Company

    My question involves labor and employment law for the state of: California

    I can't find an answer to this specific situation anywhere, so I hope someone here might know. Company A has employees with accrued vacation time at year end, then splits into companies B & C at the start of the next year. Some of the principals of company A go to company B, some to company C. Employees are split as well. Question is: Can the employees' accrued vacation time at year end just be moved to the new companies, or do employees have to be paid out for their time when they move to companies B & C? Is there any actual legal issue here, or is it up to the company(A) as to how to handle it?

    Thanks.

  2. #2
    Join Date
    Feb 2008
    Posts
    1,174

    Default Re: Vacation Time Carry Over to Successor Company

    Are employees being rehired at either B or C and actually term'd from A? Are they being given new hire paperwork or being required to sign new W-4s, I-9s etc? Are distributions from 401k accounts being allowed? (this might point to a termination/rehire situation where accrued vacation might be due). It really could depend on whether or not B/C are considered new or related employers.

    No matter what it either needs to be paid or rolled. Can't tell you for sure whether the employees could be allowed a choice as some might want to roll so they have vacation to use sooner.

  3. #3
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,443

    Default Re: Vacation Time Carry Over to Successor Company

    The reason you're not finding an answer is that there is no single answer. In your state, my state, and a very few others, as hr for me says the employees cannot lose time already accrued. It will have to either be rolled over to the new company or paid out in dollars. However, which will happen is very situation specific and may depend on the terms of split.

  4. #4
    Join Date
    Apr 2017
    Posts
    12

    Default Re: Vacation Time Carry Over to Successor Company

    There's no intention to take it away, it's merely a matter of payout vs. rolling over. The employees will effectively be termed then rehired in B/C - new startup paperwork. 401k accounts will be moved from current plan to new ones for company B/C

    Maybe this helps a little? But my concern is as CBG mentioned - is it so situation-specific that there is no single answer?

  5. #5
    Join Date
    Jun 2006
    Location
    Massachusetts
    Posts
    24,443

    Default Re: Vacation Time Carry Over to Successor Company

    Yes. It is so situation specific that there is no single answer.

    They might roll it over. They might pay it out. Either is legal. We do not know which they will do.

  6. #6
    Join Date
    Feb 2008
    Posts
    1,174

    Default Re: Vacation Time Carry Over to Successor Company

    Unfortunately that's still not enough info to answer since they are actually terminating/rehiring but transferring 401k assets. A strange combination of answers actually, but I guess it is possible depending on the wording in the 401k plan document about successor plans.

    That said, it is to the benefit of the "buyers" to force the "sellers" to get rid of the liability (i.e. pay out the vacation to the employees as of the term/sale/change date). But like cbg states, they are not required to do so as long as you don't lose the earned time.

    You could check with the DLSE as the termination might require them to payout the earned vacation. Note I said might.... again it gets into very specific details of the change.

    If you happen to be in the decision-making spot, I suggest you speak with whatever legal counsel is facilitating the change and not to guess. If you are a concerned employee, there isn't much you can do to change the situation.

    1. Sponsored Links
       

Similar Threads

  1. Resignation: Notice Given Prior to Vacation, Employer Did Not Compensate for Vacation Time
    By colebaby in forum Employment and Labor
    Replies: 2
    Last Post: 09-23-2014, 08:54 AM
  2. Job Benefits: Employer Will Take Away Vacation Time if I Take Vacation While at Out-of-State Office
    By christisbrown in forum Employment and Labor
    Replies: 4
    Last Post: 06-03-2013, 05:08 AM
  3. Enforcing Custody Orders: Does Vacation Time Superceed Regular Scheduled Time for Non-Custodial Parent
    By mamaj74 in forum Child Custody, Support and Visitation
    Replies: 9
    Last Post: 07-06-2011, 03:05 PM
  4. Job Benefits: Effect on Vacation Time when a Company is Sold
    By soccercoach11 in forum Employment and Labor
    Replies: 1
    Last Post: 06-01-2009, 12:17 PM
  5. Compensation and Overtime: Company Shorting on Sick Pay and Vacation Time
    By forgottenfables in forum Employment and Labor
    Replies: 3
    Last Post: 11-24-2008, 05:42 PM
 
 
Sponsored Links

Legal Help, Information and Resources