My company sold their business to another company. I had accrued vacation on the books with the former company. Should they pay me for the remaining vacation that I earned.?

New company took over July 1,2016. Believed vacation was carried over. Just found out today,November 14,2016, that my accrued vacation from my former company will not be paid.

2 answers  |  asked Nov 14, 2016 3:34 PM [EST]  |  applies to Pennsylvania

Answers (2)

Scott Leah
It may depend on the type of sale this was. If your old company sold its assets to the new company, not the actual ownership of the business, then typically the old company would terminate all of its employees on the date of the closing of the asset sale and the new company would immediately hire the employees it wanted to hire. In that scenario, the old company would not owe its employees for their accrued but unused vacation, sick or PTO time, as Pennsylvania law does not require that those be paid at termination unless there is a contract or policy in place that requires that they be paid.

However, if the sale was a stock sale, in which the new company purchased the old company, not just its assets, then it should stand in the old company's shoes. Nothing changed for the employees, they remained employed by the same company, the company just had a different owner. In such case, their leave would not get paid to them, but should stay on the books to use. However, this is not the usual way that a business is sold, the asset sale above is more common.

If this was an asset sale, you need to look at your employment contract or employment agreement, if you have one, to see if it speaks to the entitlement to those things at termination. You should also look at the company handbook to see if it has one. You can also try to find out how employees who have left the company in the past have been treated - did they get paid for their accrued time off. If they did, you may have a claim that such was the company policy.

posted by Scott Leah  |  Nov 15, 2016 07:04 AM [EST]
Doris Dabrowski
In Pennsylvania, entitlement to payment for unused vacation time depends on the terms of the compensation agreement between the employer and employee. In the absence of an express contract, the employer's vacation policy usually specifies entitlement to pay for unused vacation.

posted by Doris Dabrowski  |  Nov 14, 2016 4:30 PM [EST]

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