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Laid off? You may not get paid for unused time off

Making the most of your vacation

When is paid time off not paid time off? When you're issued a pink slip and don't happen to live in California, Montana or a handful of other states, according to some accounts from among 200 recent layoffs at digital media company BuzzFeed. 

More than 500 current and former BuzzFeed workers signed a letter demanding pay for time off earned by recently laid-off workers. "For a company that has always prided itself on treating its employees well, we unequivocally believe it is the only justifiable choice," the letter said.

People are often surprised to learn that no federal laws require companies to offer paid vacation or severance. That's because "it's up to each individual state," said Paula Brantner, a labor attorney and senior adviser for Workplace Fairness, a nonprofit advocacy group. 

While not paying workers for earned time off seems especially unkind given they're already losing their jobs, it's common practice in the 31 states that allow it, Drew Lunt, an attorney who advises employers on labor issues, told CBS MoneyWatch. A big difference, he added, is that employees and corporations don't typically broadcast layoff terms.

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The Lunt Group LLC

Among BuzzFeed journalists, that wasn't the case. 

"With BuzzFeed, they have a very actively engaged workforce, and active on Twitter, so they become aware of what other people are getting," Lunt told CBS MoneyWatch. "We advise employers, whether it's vacation or jury leave, to not expose those getting more to people getting less."

One laid-off worker decried losing out on pay because he moved from California, while another said he had been compensated for his accrued PTO because he resided in Colorado.

Another called his layoff "fun timing" as he has more than 100 hours of unused time saved up and two trips planned.

If the laid-off employee is suggesting his termination might have something to do with those accrued hours, he could be right, said Lunt, who added the decision largely come down to money. Companies looking to cut costs often move out "senior and higher salary workers," he said, and "accrued vacation would be part of that calculation."

From a legal perspective, some states view earned hours off as akin to wages, while others consider paid vacation to be a fringe benefit, or "something nice the company is doing for you," said Lunt. In the end, the business decision comes down to money, but employee morale and the company's reputation also come into play, he said. 

The odds of getting paid out for vacation leave have declined as fewer workers are represented by labor unions because the issue is usually negotiated in collective bargaining agreements, said Judith Conti, government affairs director at the National Employment Law Center. "As with many good terms and conditions of work, as union density decreases, so do favorable terms and conditions, not just for unionized workers, but for all others."

BuzzFeed isn't unionized, a fact one commenter noted on social media.

"We've had a number of situations recently where companies don't have a legal obligation, but calling them out has led to better results than the law ever can," said Brantner of Workplace Fairness. "Employees are bringing their plight to the attention of the public, and companies are taking that seriously."

Recent examples include Google agreeing to change its sexual harassment and arbitration policies following public protests by employees, and air traffic controllers, who Brantner credits with helping end the government shutdown. "They are not legally allowed to strike, but by slowing down operations and raising questions about safety, that had more of an impact." 

As for BuzzFeed, the company initially defended its behavior towards its laid-off workers, noting all were given at least 10 weeks severance, but added it was "open to re-evaluating this decision," according to Lenke Taylor, head of the company's human resources.

By Monday evening, BuzzFeed did an about-face. A spokesperson emailed saying "we have decided to pay out earned and unused PTO and comp days as part of the severance packages for U.S. employees impacted by these layoffs in states where this is not required by law." 

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