Company withholding then denying benefits to employees, wwyd

[athomeontheprairie]

Posting for a friend. I don't have any great advice for her, and thought others might. Or can offer insight to how this happens.

 

I'm going to try and limit my post to what is most pertinent. If you need other details, or if outside circumstances would change your opinion, please ask.

My friend has been with a company for 7 (?) years. She makes *decent* money (per the job). She can afford her (tiny) apartment in the not-so-bad part of town (the bad part, though, is only 4 blocks away) only because her dad moved in with her and they use his disability to help with rent/utilities. She lives in a major city. She lives pay check to pay check. Some of that is bad choices in the past.

 

over the past couple years, the company she was working for failed to give her the raises that were due her. They also failed to give her vacation and sick leave. The company recently sold. Prior to selling they *found* their mistakes. They gave her the raises due and missing vacation and sick leave. This company allows time to accumulate from year to year. It brought her vacation up from 2 hours to over 120.

Then the company sold. The new company is not honoring ANY vacation or sick leave. You lose it.

How is this fair? How is it legal?

What would you do? She is afraid that if she fights it, she’ll lose her job. She has a non-compete clause in her contract that would prevent her from working in this field for the next 3 years if fired. Remember, she lives paycheck to paycheck. Last year she was homeless for a solid 4 months, when a friend found out and took her in for 3 more months before she found a place she could afford. She also feels like the company stole from her. The last one for not honoring the raise/vacation schedule and the new one for not paying what is due her.

WWYD?

Edited April 15, 2016 by athomeontheprairie

[Anne]

I don't know but it certainly sounds fishy.   I think she ought to call her state ombudsman if her state has one.  Failing that, maybe her local Better Business Bureau could at least provide guidance as to whether or not this is legal in your area.

 

Anne

[Jean in Newcastle]

Is she the only one this has happened to?

[athomeontheprairie]

Is she the only one this has happened to?

No. But very few are losing as much. Some of the few are losing over 200 hours.

[SparklyUnicorn]

I didn't think these things were protected.  I think she probably can't do anything.

 

I hope I'm wrong though.

 

 

[JustEm]

Not positive but I believe the new owner doesn't have to honor it but under certain circumstances the old owner would have to pay for any unused hours. It depends on what the purchasing agreements says in terms of if the new owner or old owner are responsible for compensation.

[Spryte]

Trying to be sure I understand: she was given raises, but they didn't go into her checks? But they've fixed that, right? She's received the back pay she was owed?

 

The issue is mainly that she accrued vacation that she didn't take? Was that 120 hours or days of vacation that she's due? 120 days is a lot!

 

I don't know if the new owners are required to honor vacation that has been carried over from years with a different owner. I have a friend who was given a "use it or lose it" deadline during a buy out. Are they going to honor her benefits in future, starting fresh?

 

I would suggest that she sit down and have a conversation with her employer, re: moving forward. Maybe there is a compromise here. Even if it is taking some part of the vacation, or they partially buy it out, that might make her feel less violated.

 

And certainly, going forward, always check those paychecks for accuracy, with regard to salary as well as vacation and sick days.

 

I'm so sorry. She must be feeling really rotten about this!

[Arcadia]

The buyer company probably has it written that whichever employees stay after the buyout becomes new employees of the buyer company.

 

What people had done was cash out the vacation hours before the change of ownership. Your friend might have to log a claim with her former employer but I don't know how successful that would be.

 

My former employer (US tech MNC, listed on NASDAQ) bought another company (also US tech) with the clause that no one from the sold company who opt to stay and work under the new boss would be retrenched within the first year of the buyout. However benefits were all change so everyone from the sold company and the buying company have the same employee benefits.

Edited April 15, 2016 by Arcadia

[gardenmom5]

we've been through a number of failing companies being acquired by larger companies. dh finally started his own business..

 

tbh - she works for a failure of a company and she should go look for another job before things get even worse.  the first company didn't keep their promises because they were failing - that's likely why they sold out.  the buyer *thought* they could fix things, and tried to honor those promises, and found out the company was and probably always would be a money pit - and sold it to a 2nd buyer.

 

when companies acquire - through whatever means - another company, what things are legally required can be very different as part of the purchase offer. I would  suggest she find out what are the legal requirements of the sale regarding employees by the current owner.

 

sometimes the employees do come out with nothing.

[plansrme]

over the past couple years, the company she was working for failed to give her the raises that were due her.  â€‹They also failed to give her vacation and sick leave. The company recently sold. Prior to selling they *found* their mistakes. They gave her the raises due and missing vacation and sick leave. This company allows time to accumulate from year to year. It brought her vacation up from 2 hours to over 120.

Then the company sold. The new company is not honoring ANY vacation or sick leave. You lose it.

How is this fair? How is it legal?

What would you do? She is afraid that if she fights it, she’ll lose her job. She has a non-compete clause in her contract that would prevent her from working in this field for the next 3 years if fired. Remember, she lives paycheck to paycheck. Last year she was homeless for a solid 4 months, when a friend found out and took her in for 3 more months before she found a place she could afford. She also feels like the company stole from her. The last one for not honoring the raise/vacation schedule and the new one for not paying what is due her.

WWYD?

 

1.  There is no such thing as "raises that were due her."  If they didn't give her raises, she doesn't get raises unless she is a union employee and the CBA provides otherwise.

 

2.  If they gave her back accruals of vacation and sick leave, and the new employer is not honoring them, that is probably their prerogative unless she is in California.  Another handful of states may protect leave accruals, but it's mostly California.

 

3.  Also depending on her state, a three-year non-compete may be completely unenforceable.  She can google "enforceability of a non-compete in State X" and probably figure that out.  If she is that low paid, I highly doubt that it would be enforceable OR that the new employer would bother to enforce it, but this varies tremendously from one state to another.

 

Her state's department of labor probably has someone who can help her with these questions.  These are state law issues, so she needs to be sure to call her state DOL, not the local office of the federal DOL.

[Guest]

I assume the raises she was due were contractual.

 

The question is, why didnt she sort it the moment SHE realized?

 

Employee compensation packages are often part of the negotiations between companies. She is sol, I think.

Edited April 15, 2016 by OKBud

[athomeontheprairie]

1. No back pay on the raises. The raises were contingent on completing certain in-company training. For each choose completed, receive a raise of a certain amount. She took the max classes, but only received partial raise. Other raises were based on time with the company

2. The vacation hours were never hers. She never had an option to use them. They didn't "award" then until the buyout occurred and they realized their clerical error. (Not sure these are the correct terms. Hope you understand)

3. The one company want failing. It was thriving. The owners wanted to retire, and selling their successful business to another equally successful company was a good option.

4. Thanks everyone for your thoughts and ideas. I'll pass them along. I hurt for her. She's had a rough year

Edited April 15, 2016 by athomeontheprairie

[Guest]

That really does bite jo matter how you slice it.

[TechWife]

 

Her state's department of labor probably has someone who can help her with these questions.  These are state law issues, so she needs to be sure to call her state DOL, not the local office of the federal DOL.

 

Yes, this. Her state DOL is the starting point.

[gardenmom5]

 

 

3.  Also depending on her state, a three-year non-compete may be completely unenforceable.  She can google "enforceability of a non-compete in State X" and probably figure that out.  If she is that low paid, I highly doubt that it would be enforceable OR that the new employer would bother to enforce it, but this varies tremendously from one state to another.

 

Her state's department of labor probably has someone who can help her with these questions.  These are state law issues, so she needs to be sure to call her state DOL, not the local office of the federal DOL.

 

I see a shiatsu guy who JUST finished a lawsuit with his former employer over a non-compete.  the former employer learned the hard way - there are geographic limits  to a non-compete for a b&m business in our state.   there were a number of other  things their lawyer learned the hard way - like the need to actually form a case . . . (the lawyer for the club still would have lost.  shiatsu-guy quit and started on his own business due to an injury they wouldn't accommodate.  refusal to accommodate - especially as it was one that would heal in time - was illegal . . . .)

he started his own business (why former employeer sued him) - and is now making more than he did working for them.

[Valley Girl]

1. No back pay on the raises. The raises were contingent on completing certain in-company training. For each choose completed, receive a raise of a certain amount. She took the max classes, but only received partial raise. Other raises were based on time with the company

2. The vacation hours were never hers. She never had an option to use them. They didn't "award" then until the buyout occurred and they realized their clerical error. (Not sure these are the correct terms. Hope you understand)

3. The one company want failing. It was thriving. The owners wanted to retire, and selling their successful business to another equally successful company was a good option.

4. Thanks everyone for your thoughts and ideas. I'll pass them along. I hurt for her. She's had a rough year

 

Your poor friend. When people start jobs, vacation time and such is usually discussed. Was there no discussion when she started? Did she never, ever take paid vacation? While I feel sorry for her, I really have to wonder why she didn't ask questions at the time these "mistakes" happened. What did she do when the promised raises didn't show up in her paycheck? Employees have to be responsible for keeping tabs on these things, too, if only to protect themselves and prevent the kind of situation your friend has encountered. I hope she gets what she is due. I agree with other posters who said she should contact her state dept. of labor or her state representative. Her local state legislator's office may be able to direct her to resources or help. In my experience, they're often quite helpful with constituent services.

[athomeontheprairie]

Your poor friend. When people start jobs, vacation time and such is usually discussed. Was there no discussion when she started? Did she never, ever take paid vacation? While I feel sorry for her, I really have to wonder why she didn't ask questions at the time these "mistakes" happened. What did she do when the promised raises didn't show up in her paycheck? Employees have to be responsible for keeping tabs on these things, too, if only to protect themselves and prevent the kind of situation your friend has encountered. I hope she gets what she is due. I agree with other posters who said she should contact her state dept. of labor or her state representative. Her local state legislator's office may be able to direct her to resources or help. In my experience, they're often quite helpful with constituent services.

I think what happened is during the time the everything should have been given she had major life problems. Homelessness, creditors, mom in hospital almost dying, brother divorcing, best friend dying. And in all that, she overlooked her checks. That's just am (educated) guess though.

 

And no, she seldom took time off-though she desperately needed it.

[QueenCat]

 

over the past couple years, the company she was working for failed to give her the raises that were due her. They also failed to give her vacation and sick leave. The company recently sold. Prior to selling they *found* their mistakes. They gave her the raises due and missing vacation and sick leave. This company allows time to accumulate from year to year. It brought her vacation up from 2 hours to over 120.

Then the company sold. The new company is not honoring ANY vacation or sick leave. You lose it.

How is this fair? How is it legal?

What would you do? She is afraid that if she fights it, she’ll lose her job. She has a non-compete clause in her contract that would prevent her from working in this field for the next 3 years if fired. Remember, she lives paycheck to paycheck. Last year she was homeless for a solid 4 months, when a friend found out and took her in for 3 more months before she found a place she could afford. She also feels like the company stole from her. The last one for not honoring the raise/vacation schedule and the new one for not paying what is due her.

WWYD?

 

Whenever dh has had a new company take over where he works (often in govt contracting), the OLD company had to pay out the vacation time owed. So if he'd had 120 hours with the old company, the old company would pay him for 120 hours of work. The owed vacation has usually shown up in the last paycheck from that company but once it was a separate check. The NEW company did not owe him the OLD company's vacation time. Vacation time started over with the new company.

[Reefgazer]

She needs to call the employment commissioner in her state and find out what the laws are, because they vary from state to state; any burden of vacation would be on the old company, it seems.  At the same time, she needs to start looking for new employment because that new company will never be a good place for her to work long-term because of potential resentment that probably has built up (understandably).  She should not tell the company where she is interviewing (or even that she is interviewing), where she gets a job, or even if she is n the same city.  Let them find her to enforce the non-compete clause; all that is pretty tough to do for an employee that is not high-level, so she shouldn't give that another thought.

Edited April 15, 2016 by reefgazer

[Reefgazer]

I suspect this, as well, because this happened to me (although I worked for a decent company that was clear in informing us up-front what the deal and the conditions were).

The buyer company probably has it written that whichever employees stay after the buyout becomes new employees of the buyer company.

What people had done was cash out the vacation hours before the change of ownership. Your friend might have to log a claim with her former employer but I don't know how successful that would be.

My former employer (US tech MNC, listed on NASDAQ) bought another company (also US tech) with the clause that no one from the sold company who opt to stay and work under the new boss would be retrenched within the first year of the buyout. However benefits were all change so everyone from the sold company and the buying company have the same employee benefits.

 

[Reefgazer]

The BS-ed her on this.  The company knew *long* before the buyout that there were clerical errors and vacation due because combing through those records is part of the due diligence that companies do before they buy, and those buys don't happen overnight.  The old company just didn't *tell* her in a timely way, probably because they needed her free labor before the sale went through. 

1. No back pay on the raises. The raises were contingent on completing certain in-company training. For each choose completed, receive a raise of a certain amount. She took the max classes, but only received partial raise. Other raises were based on time with the company
2. The vacation hours were never hers. She never had an option to use them. They didn't "award" then until the buyout occurred and they realized their clerical error. (Not sure these are the correct terms. Hope you understand)
3. The one company want failing. It was thriving. The owners wanted to retire, and selling their successful business to another equally successful company was a good option.
4. Thanks everyone for your thoughts and ideas. I'll pass them along. I hurt for her. She's had a rough year

 

Edited April 15, 2016 by reefgazer

[LucyStoner]

For a low wage, non-management level job the non-compete is highly unlikely to be enforceable.

 

It is important to check every pay stub as they come and follow up right away if accrual is off or something is wrong. Make sure she is getting paystubs and knows how to read them.