Expert: Thomas R. Ballas - 6/29/2009

Question
Employees are currently paid out for all accrued vacation.  Effective 8/1/09 we are thinking about changing the policy to cap the payout at 160 hours.
Would we still be obligated to pay out all vacation that was accrued under the old policy (prior to 8/1/09). Once we change the policy we would cap all vacation that was accrued after 8/1/09?

Answer
Maceo:

It depends on what state you are in.  Look on your state's web site under employment to see if vacation must be paid out as wages.  It probably does, in which case you will have to pay out the excess of 160, before the new policy starts.

So, if someone has 180 hours under the old policy, and you start the new policy, you would have to pay them out the 20 hours, down to the new cap.

Tom Ballas