We have a policy in our handbook that allows for additional vacation days for experienced employees. This policy was put in place to entice one specific employee to accept a job here. They are an exempt employee. We are a church that has a committee that reviews the handbook and makes changes to it. We have new members that feel this policy is discriminatory to other employees and could result in a lawsuit if a new employee is not granted the extra days. They want to remove the policy. My question is how to handle the employee that receives the days. Is he owed compensation to “make him whole” as one member put it? Or since he is an exempt employee, he is not owed anything? I have employees that do not take all of their vacation days that are exempt and I don’t pay them for their unused days. From my understanding, exempt employees don’t truly have vacation days. Employers can have a policy and excessive absenteeism is a disciplinary issue but salaried exempt employees can’t be docked for their pay. I would assume this would mean that don’t have to be paid for vacation days they don’t take.

The policy is fine as long as you define an “experienced” employee. Since the target employee is Exempt – would this be a benefit for Exempt employees only? That would work way better than offering the benefit to both Exempt and Non-exempt workers. If there are other employees who are basically equal to the target worker in duties and seniority, then they should all be getting the benefit. The re-write should just include more specificity. If you remove the policy – then the target employee may need to lose the benefit you used to attract this specific person. Fairness must come first and yes, another employee may cry discrimination and win.

The exempt worker getting the extra days off should be paid for the time off if no work is performed and these are basically unpaid days off on which the paid time off is being used. (Paid Vacation days) You are only required to pay people for unused days if your policy says you will. If you have no policy and in the past, you have paid people – or even one person – for their unused days, then it is wise to pay the days until you put in place a policy changing or clarifying this practice. Write the policy and make it effective 30 days from the date everyone signs an acknowledgment. The key here is to be consistent.

Exempt workers can freely receive extra time off, extra pay, bonuses and other perks. But, if you do it for one person, all workers in that same class of workers should be treated the same. There is no statue that explains all of this. The government stays out of PTO arguments most of the time. So, the laws concerning this issue aren’t really FLSA, but anti-discrimination laws.

Hope this helps.

October 2017