Layoff severance pay question

Factual Questions
1

I may get laid off at my job. Rather than panic about it, I’ve tried to make the most out of the situation; saving up money, holding off on major purchases, possibly moving back in with folks, etc. I know that if I got laid off my employer would have to pay out all the vacation time I earned for that year (because we earn it during the previous year, and in my case I would hypothetically get laid off at the beginning of next year).

But what I dont know about is sick time. Because I have good attendance and sick hours accumulate indefinitely, I have a fairly big chunk of sicktime. Nobody I asked at my work, from HR to payroll to our Union, seems to be able to get a straight answer on whether or not they would pay us out for sick time.

I’d like to know if they did, because its a months worth of pay right now. If its all going in the toilet, I’d rather use it now while I’m still getting paid to stay home if I don’t feel well.

2

Check with your state labor department - it should be covered under state law.

3

Where ever I’ve worked sick time was a use it or loss it type deal. Not payable upon termination. The fact that the people in your company who should know are being mum/dumb about an answer is because they work for the company, not you. It dosen’t benifit the company to let you have sick days now or pay you for them when you leave. Unless you have a contract that states that they do or there is a state law that affects the payout of sick days I would ass-u-me that they don’t. Still, check with your local laws is always good advice. YMMV.

On as re-read, why dosen’t your union rep know this? Why isn’t he finding this out for you? :dubious:

4

One of my sons just recently got permanently laid off from his job. They gave him 1 weeks pay for every year he was there rounded up, and all his personal/vacation days.

But the 10 days of sick leave he still had accrued they told him to pound sand.
This is in Wisconsin if that helps.

5

I’ve never heard of sick leave being paid out, except in the situation where the company has a single pool that’s supposed to cover vacation and sick leave (my employer 20ish years ago worked that way; Typo Knig’s current employer works that way).

Of course, in a way that (not paying out) penalizes people who are healthy, at the expense of people who aren’t healthy (or just have fewer qualms about staying home if they’re a tad under the weather). Personally, while I wouldn’t abuse the sick leave (because that might bring your name to the attention of the people making layoff decisions), I might not worry too much about coming in if you’re borderline.

The Federal government (US fed, that is) has under some circumstances allowed you to get retirement credit for untaken sick leave (I think this was only under the plan that phased out in the 80s but it’s been a few years since I’ve looked at this). As in if you’d saved up 3 months of sick leave, and had worked for 29 years and 9 months before you retired, you’d get credit for 30 years of service in calculating your pension.

6

Yes, by the time I worked for the Feds (1991 - 1994), this provision had been phased out unless you were grandfathered for prior Federal service.

7

Sick time as well as holiday time payment upon seperation varies from state to state you need to check with your state labour board.

In Illinois for instance, sick time and holiday time is considered “conditional” benefits. In other words your not entititled to sick time unless you’re sick. So when you get fired or quit it’s not paid out. Same as holiday time. If you get fired or quit before the holiday you’re not entitled to be paid for it.

Vacation time is considered “earned” and must be paid on a pro-rated basis.

Now here is where it gets tricky. Some employers lump all their time off in one big bucket called PTO (Paid Time Off) or some other similar thing.

PTO must be paid out upon seperation UNLESS it’s designated into areas. For instance, I worked for Starwood Hotels and our time off was all PTO. That means, sick, holiday and vacation time was paid out upon seperation. Then they changed it.

They changed it so half the time off went into a “bucket” called vacation/holiday and half went into a bucket called “sick” time.

Thus the sick time they didn’t have to pay out.

Why did they do this? Because any benefits the company HAS to pay out but has yet to pay out shows up on the balance sheet as a liablity and that isn’t good. By taking all the time off and dividing it in two, suddenly the company no longer has to put half the “Time off” it owes the employees in the liablity colum and that reduces the liabilities owed.

Now here’s where it gets even MORE tricky.

In Illinois (but not all states have ruled this), IF the sick time is accured for on the balance sheet, the Illinois Courts have ruled it MUST be paid out, regardless. The Illinois Courts have said, “if you’re accuring for the cost of the sick time, it’s the same thing as a liability.”

Now I live in Chicago so when Starwood let me go, I demanded my sick time. They refused, I told H/R they were in the wrong, and I’d simply contact wages and hours of the Illinois Department of Labour, and they’d get my money and fine the hotel for not following procedure.

When I showed them the court cases and told them to sign a paper refusing to pay me the sick time, the controller, immediately cut me a check.

I know she did this 'cause she just didn’t want to be bothered with wages and hours coming in and making a problem, not because she thought I was right, even though I was.

My advice to you is check with your State Department of Labour. Secondly demand your sick time to be paid out. If they refuse, demand you get the refusal in writing. Or do your requesting of the sick time via email so you have records.

A lot of companies will pay it out just to avoid a possible audit by wages and hours (I’ve been through one and it ain’t pretty).

And if they still refuse, after you leave the company go to your “Wages and hours” division of the State Labour Board and say you were cheated and they’ll investigate and get your money if your state owes it to you.

As a last resort you could threaten to sue. In all states if you sue and win the company has to pay your court costs and sometimes you can get up to three times the amount owed back to you.

You have between 1 year and 3 years to get your money from past jobs, so there is no great hurry but disputes for wages should be filed ASAP

8

Mighigan here. Been laid off twice. Both times I received vacation pay and severance, but no sick time.

9

It may also depend on the benefit rules in effect at the time you were hired.

I once worked for a county government, and when I quit, I was paid out for many weeks of accumulated sick time. Because at the time I was hired, the contract said that employees were paid any unused sick time when they left. (I had been hired on June 23rd many years before. The new contract that took effect on July 1st did not include this provision.) So many other employees did NOT get paid accumulated sick time when they left. but us old-timers did.

10

I’m in Ohio. I’ve never heard of anyone outside of a union getting sick pay as a payout. It is a function of your contract so if your union can’t answer a contract question then something is wrong. Normal payout is 2 weeks plus a week for each year but that is a corporate policy.

11

The only people that I have heard of being paid out on sick time were those who got PTO.

When I got laid off after 17 years I got all my vacation, personal holidays, but not one hour of sick time. In the last 15 year I have quit or been alid off from 5 different employeers, never recieved a day’s sick time in pay off.

Why your union rep does not know this is a bad thing.

I would check your employee hand book they may have an exception to the law. Also your state may be different.

Also many people think an employeer is required to give severance pay and they are not unless the employee hand book states different.

12

This was changed in the last week. Federal employees under FERS who leave federal service normally lost all sick leave unless re-employed in federal service within three years. Apparently that restriction has been removed as well as FERS employees may now accumulate sick leave and apply it toward retirement, the same as CSRS and CSRS-offset employees.