Q. Several times I have seen mention of "PTO banks", a combination of sick, personal and vacation days. Our current policy is for employees to accrue personal/sick time as well as vacation time, however only unused, accrued vacation time has to be paid out at separation and we do not allow for rollover of days and/or hours from year to year. What is the law regarding payout of any unused time when a separation occurs?
A. The company must pay out the for the vacation time that has been earned, but not yet used upon termination of employment based on the time off policy as outlined in your Summary Plan Description (SPD). If your company operates in Massachusetts, General Law Chapter 149: Section 148 governs what must be paid to an employee upon termination:
As always, we encourage you to seek the opinion of your legal counsel when determining the applicability of these policies for your organization.
Q. Does a US corporation with US citizen employees working in a foreign country have to pay those employees in US dollars? Can the paycheck be issued with that corporation’s foreign banking account?
A. There is no explicit requirement for a US corporation to pay its US citizens working in a foreign country in US dollars. However, an organization should always follow all applicable labor laws and its documented company pay policies. When developing your policy, you may consider both the potential cost and employee relations issues related to paying US expat employees. For example, if you are paying in US dollars and the dollar is dropping in value against the local currency, the employee may feel that their employment "deal" is being compromised due to their decreased purchasing power. Similarly, under the same currency environment, if the company pays in local currency, it may incur a higher payroll cost than if expat employees were paid in US dollars.
As always, we encourage you to seek the opinion of your legal counsel when determining the applicability of these laws and policies for your organization.
Q. Is an employer able to attach criteria other than number of hours worked to the definition of full time employee for the reason of determining health insurance benefit eligibility (or is the number of hours the only main criteria for defining eligibility)?
A. Yes, an employer can attach a criteria other than number of hours worked for the reason of determining health insurance benefit eligibility. Generally, hours worked is the criteria for eligibility.
In determining eligibility, the employer should consider the non-discrimination testing requirements for self-insured plans, MA Healthcare Reform requirements and the future impact of National HealthCare Reform (non-grandfathered plans that are fully-insured subject to non-discrimination testing; Free Rider Provision).
Q. I have an employee that is out of ST disability. I understand that I am required to keep a job open for her but I am I required to keep the same job she left at the same pay?
A. I am assuming when you say you have an employee who is out on Short-term Disability that the employee is receiving payments under a Short-term Disability insurance program. Obtaining benefits under a Short-term Disability plan does not determine job protection – it provides a form of salary continuance while disabled.
The Family Medical Leave Act (FMLA), a Federal Law enacted in 1993 provides for job protection. FMLA entitles eligible employees to take up to 12 weeks of unpaid leave for serious health conditions, certain family medical conditions, childbirth, adoption, or foster care. It requires employers to provide subsidized health insurance coverage to employees during their leave. The law requires that an employee must be reinstated to the “same” or “equivalent” job at the conclusion of the FMLA leave. The law applies to all employers with 50 or more employees in a 75-mile radius.
In addition to FMLA, you should review your formal leave policy to examine disability issues such as length of leave provided and return to work protections.