Retroactively Cutting Employee Vacation Time Could Be Breach of Contract

Q: My employer announced a few weeks ago that the number of vacation days we earn per year has been reduced, retroactive to 1999. As a result, many employees who had a couple of days’ vacation in the bank are now in the hole several days.

Can they do this?

--J.M., Costa Mesa

A: It is illegal for an employer to retroactively change compensation or benefit commitments.

It is unethical and illegal to induce you to work according to certain promises of compensation or benefits and then to retroactively reduce or eliminate them. It’s the same concept as inducing you to work for a certain salary, then cutting your pay after you have completed your workweek. This could constitute a breach of your employer’s contract with you. If the company never intended to comply, its actions could be considered fraud.

An employer could change benefits in the future, however, if it doesn’t violate its contractual commitments. It also would be appropriate for the employer to give adequate advance notice of these changes in benefits.

You could raise your concerns with your employer--either individually or by joining with other employees.

If you are unsuccessful, you could contact the California Division of Labor Standards Enforcement, which should provide assistance without charge.

Although it would be illegal for the company to retaliate against you, it can be difficult to prove more subtle forms of retaliation that might affect future opportunities there.

--Don D. Sessions

Employee rights attorney

Mission Viejo

Firms Aren’t Required to Offer Vacations

Q: One of my colleagues has been employed 20 months and has not had any time off (not even sick time). Isn’t she entitled to a vacation after one year?

--P.K., Century City

A: That depends on your company’s policies.

There is no legal requirement that employees be given vacation. Most employers provide paid vacation after one year and many employers also provide a few paid sick days, but neither is required by law. If a policy provides for vacation time, it cannot be forfeited if it is not used. But an employer can prevent employees from accruing more vacation until they use some already accrued vacation.

If your company provides vacation benefits but has a cap on the amount of unused vacation that may accrue, the failure of the employee to whom you refer to take vacation may prevent her from accruing any more vacation.

--James J. McDonald Jr.

Attorney, Fisher & Phillips LLP

Labor law instructor, UC Irvine

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If you have a question about an on-the-job situation, please mail it to Shop Talk, Los Angeles Times, P.O. Box 2008, Costa Mesa, CA 92626; dictate it to (714) 966-7873; or e-mail it to [email protected]. Include your initials and hometown. The Shop Talk column is designed to answer questions of general interest. It should not be construed as legal advice. Recent Shop Talk columns are available at http://ukobiw.net/shoptalk.