Do I have to pay back the vacation days I used before quitting?

November 5, 2017 8:32 PM

My company says I owe them. Do I really?

I’m in California. I quit my bank job in March of this year. Full time and salary. Before I left the company, I used two out of my 3 paid vacation weeks. Because of the length of time I was with my employer I earned 3 weeks per year. Once I quit I thought that was the end of it until I received notice that they unintentionally paid me extra for the vacation that I took but didn’t earn/accrue, and that I owe them for those weeks. They gave me an amount and a deadline; I have to pay the amount by the end of the year or the IRS will be notified and the amount due will increase.

Is this common? Do I actually owe them? I feel like when I first started with the company I wouldn’t have had paid time off for the year, and that I had to earn my weeks before I could take my first vacation. My experience with the company and how they treated their employees wasn’t the best, so I would prefer to not pay it. Does this situation have the possibility of the amount being sent to collections? The whole situation just seems bizarre.

Any insight is very appreciated, thank you.

posted by lain to Law & Government (15 answers total)

Do I actually owe them?

Only way to find out is to go back over your records of what you were paid and when, and square the results against your calculations of what you should have been paid and when.

If it turns out that the company has indeed erroneously paid you for time you didn't work there, or for vacation time you took that your employment contract did not in fact entitle you to have taken, then yes you owe them money.

But it seems to me that any employer capable of screwing its payroll arrangements badly enough for such a thing to happen would also have to be capable of screwing its termination arrangements equally badly - so do check, and if your results differ from theirs, dispute their demand.
posted by flabdablet at 8:42 PM on November 5, 2017 [8 favorites]

This is not super clear, and it depends on the details of exactly how you accrue and take vacation, but in general leave is accrued evenly throughout the year, and some companies will let you go into the red and use vacation time before you accrue it. If you started the year with 0 vacation time and you left at the end of March, and you accrued vacation time evenly, then you would have accrued one week and taken two, so yes, you would owe them a week of pay for that.

If you owe them the money, then you owe them the money, and they can take all the actions against you that someone who you owe money can take.

But there are a lot of "in general" and "assuming" in what I said, so it is likely worth it to have a consult with a lawyer, or at least ask the company for more details and documentation and proof, or whatnot.
posted by brainmouse at 8:42 PM on November 5, 2017 [9 favorites]

You earned three weeks/15 workdays per year, or 1.25 days per month. Assuming that you had no accrued vacation time (or that it didn't roll over), and that you quit around the beginning of March, you would have earned 1.25 days each for the months of January and February, for a total of 2.5 days or half a week. You got paid for two weeks, so you owe them a week and a half's worth of pay.
posted by halogen at 8:43 PM on November 5, 2017 [3 favorites]

What it sounds like happened is this:

When you left the company, they paid you for vacation time that you accrued, but did not take. This is pretty common. But in this case, due to a clerical error, they paid you too much - perhaps they paid you for three weeks accrued, but should have only paid you for one week accrued, because you used two weeks of vacation. So now they want their money back.

If that's the case, then yes, it's their money and you should give it back in order to avoid dealing with legal stuff or collection agencies.

Alternatively, you didn't actually have vacation accrued, but used it anyway and got paid for it (also pretty common in salaried positions), which on preview is what halogen and brainmouse are theorizing. And in this case, you also still own them that money.
posted by slagheap at 8:46 PM on November 5, 2017 [5 favorites]

Not every company has employees accrue vacation steadily during the year as halogen describes. Some companies award the vacation in total at the beginning of the year. My company awards all our floating holidays right away and the rest accrues evenly. My husband's company used to award the full vacation week as soon as the calendar ticked over, but now has switched to the year-long accrual. For us, these policies were outlined in each of our employee handbooks. Do you have one?
posted by Tandem Affinity at 8:50 PM on November 5, 2017 [3 favorites]

Your employee manual should explain how your vacation accrues and should detail the rules that the company uses to determine how and when vacation accrues. That and your payment records should allow you to figure out whether they're right or you are.
posted by quince at 9:08 PM on November 5, 2017 [2 favorites]

When you left the company, they paid you for vacation time that you accrued, but did not take. This is pretty common.

Not only "common" - it's California law. If this is what happened- they paid a check on your last day for two weeks of unused vacation, but you were really owed one- then they overpaid you and you owe them.

But that's not what it sounds like to me. It sounds like they agreed to let you "go negative" - take more vacation than you had accrued, putting your total days accrued into negative. In that case, you are 100% not morally obligated to pay, and I am 99% sure you are not legally obligated. They can't take back compensation they knowingly paid you because they're mad. Check with a lawyer or free legal aid thingie to make sure.
posted by drjimmy11 at 9:10 PM on November 5, 2017 [1 favorite]

ps your "employee manual" has zero power to overrule California or federal law.
posted by drjimmy11 at 9:11 PM on November 5, 2017 [6 favorites]

If they promised you three weeks vacation up front and it was in your contract or whatever you signed, I would say you signed on for three weeks of vacation and you are not paying back vacation days you used because they don't like that you got a new job. Check whatever you signed when you joined the bank. I would think your vacation time is laid out in there. See if it mentions accrual or if it just says you get three weeks per calendar year. Tough on them if you took your vacation in March and not December. Also, this company obviously sucks.
posted by AppleTurnover at 10:57 PM on November 5, 2017

Contrary to what drjimmy says, if that's what happened I would say you are 100% morally obligated to pay, and you are definitely legally obligated to. From the California Labor Commissioner's Office:

Under California law, vacation benefits are a form of wages, and an employer's practice of allowing employees to take their vacation before it is actually earned or accrued is in effect an advance on wages. Thus, if an employee takes an advance on vacation and then quits or is discharged before all of that advanced vacation is earned or accrued, the effect is that there has been an overpayment of wages which is a debt owed to the employer.

posted by brainmouse at 11:01 PM on November 5, 2017 [17 favorites]

If you'd quit and hadn't taken any vacation days, they would have owed you pay for those unused days, usually prorated - so if you stayed 3 months, they would have owed you pay for 3.75 days.
It works the other way around too, its not uncommon to be allowed to take more holiday than you've technically accrued because the assumption is that you'll continue to work the rest of the year, but if you've used more than you accrued when you leave, you owe them for it. Usually it would just be deducted from your final paycheck but clearly that hasn't happened here.
posted by missmagenta at 1:49 AM on November 6, 2017

Some employers begin the accrual of vacation time from January 1, or the beginning of the fiscal year, if different. Some employers begin the accrual from the anniversary of the date of hire.

Many employers do not make it clear which one they use.
posted by megatherium at 4:05 AM on November 6, 2017

ps your "employee manual" has zero power to overrule California or federal law.

I am not a lawyer, but some companies have you sign the employee handbook and it acts as a defacto employment contract. If you agreed to pay back the days, I believe you would be obligated to.
posted by hrj at 10:42 AM on November 6, 2017

In your checking, do look back further than the current year. depending on your employment arrangements, you may have under- or over-used your leave entitlements in the past, and these may form part of your employer's calculations.
posted by GeeEmm at 1:08 PM on November 6, 2017

At my company, vacation hours are accrued with each paycheck, so I don't get the full X weeks all at once. If you took 2 weeks of vacation, but had only accrued 1.5 weeks (for instance) at the time you quit I would assume you'd be on the hook for the extra .5 weeks.

That said, definitely double-check their math, and make sure you account for any unused vacation days that may have carried over from previous years. My employer typically deducts from (or adds to, in the case of unused vacation time) the final paycheck to settle this, so I'm a bit surprised yours didn't do the same.
posted by Aleyn at 3:07 PM on November 6, 2017