BIA REPORT
Employment Law Update
State and federal developments of interest to New Hampshire employers
February 2000 issue:
By Andrea Johnstone and Anne Scheer*
Employee Awarded Earned Time Accruals Despite Policy Change
Does your company have a paid time off policy that allows employees to accumulate and carry forward unused days? Are you thinking about changing it? Perhaps to a use it or lose it type policy or maybe capping the number of days that can be accumulated? Beware. If the policy change impacts the days earned under the former policy, the company may find itself on the losing end of a wage claim.
In Morency v. Prime Care Medical, Inc., the New Hampshire Department of Labor recently ruled that earned time days earned prior to a change in company policy that stated that "Leave on the books as of December 31, 1998 must be taken by the end of calendar year 1999" or be lost and that "All leave must be used and can no longer be cashed in" did not limit the employee's right to be paid for accrued unused earned time days she earned prior to her termination. Prior to the change in policy, the employer permitted employees to carry over unused earned time days from year to year and allowed for a cash out of unused days. The employer argued that as a result of the change in policy, the employee was not entitled to be paid unused earned time days upon termination.
The NH DOL disagreed and ordered that the employee be paid for 135.6 hours of earned time which had been accrued prior to the change in policy. The DOL based the award on its conclusion that the term of the policy indicating that accumulated earned time can not be cashed out was unclear and does not adequately state what happens to earned time days when an employee is voluntarily or involuntarily terminated and that the days in question were earned before the change in policy.
Employers are reminded that while New Hampshire law permits prospective, and not retroactive, changes to vacation, sick, personal days, holiday pay, earned time, bonuses and other fringe benefit policies. New Hampshire Code of Administrative Rules, Lab. 803.04(d) provides that any such benefits earned accrued or vested prior to the change shall not lapse due to the change.
This case demonstrates the need for polices regarding paid time off to be absolutely clear about when accrued earned time will and will not be paid. It also serves to remind businesses that if carry over of unused days was previously permitted and would have been paid upon termination, how those accruals will be handled must be carefully considered so as not to run afoul of NH law.
Costly Employee Error Could Not Be Deducted from Wages
Withholding the price of employee carelessness or error from an employee's wages may sound like a good way to teach the employee a lesson. However, as the NH DOL's decision in Stevens v. Sangermano Oil Co. makes clear, it is not permissible under NH Law. In this case, the employee accidentally pumped heating oil into a diesel fuel tank. The employer "in an effort to show the claimant how to be responsible for his error" then deducted the cost of the fuel from wages due. The DOL ruled "RSA 275:48, I prohibits the employer from withholding or deducting any portion of an employee's wages for occurrences such as the error in question."
Notice of Termination Upheld As Valid Prerequisite to Vacation Pay
In Decker v. Monro Muffler Brake & Service, the NH DOL denied an employee's claim for unpaid vacation days. Under the employer's policy, accrued unused vacation days were paid upon termination only if the employee resigned with two weeks notice and worked the notice period. This caveat to payment was stated in the employee handbook and the employer was able to demonstrate that a copy of the handbook had been provided to the employee. The DOL found that the requisite two-week advanced notice of termination had not been provided by the claimant, despite his claim that he had "informally" to the employer one month earlier that he was applying for another job and would be leaving if it was offered to him. As a result, he was not entitled to be paid the vacation pay he was seeking.
Personnel File Improperly Considered in Whistleblower Claim
The NH Supreme Court in Appeal of Frank J. Coffey, recently reversed and remanded a whistleblowers' protection case on the grounds that the NH DOL's consideration of the entire contents of the employee's personnel file in making its decision violated the employee's due process rights. In the initial case before the NH DOL the employee claimed he was terminated for challenging the company's decision not to pay bonuses under an existing incentive plan. The employer claimed that he was terminated for attendance problems. At the hearing, the employer introduced one prior written warning into evidence. The NH DOL, who had a complete copy of the employee's personnel file (although a complete copy of the file was never introduced at the hearing) concluded that the employee's failure to report for work on the date of his termination coupled with "other entries" in the personnel file, gave the employer sufficient cause to terminate employment. The employee took issue with the DOL's consideration of "other entries" in his personnel file which had not been introduced at the hearing and about which he was not provided with an opportunity to respond. The Court agreed.
Change in Supervisor Presumed Not To Be A Reasonable Accommodation
A common request, particularly by employees suffering from depression and other mental disabilities, is for a change in supervisor. Often times the employee claims that their condition was aggravated or triggered by interactions with their immediate supervisor. In Kennedy v. Dresser Rand Co., the Second Circuit Court of Appeals, held that while there could not be a per se rule that replacement of a supervisor can never be a reasonable accommodation, a presumption exists that to change supervisors is unreasonable. Employers are cautioned, however, not to dismiss an employee's request to be assigned to another supervisor out of hand. Whether an accommodation is reasonable must be determined on a case by case basis. Additionally, the employer must be able to establish that it satisfied its obligations to engage in an interactive process with the employee about what reasonable accommodations, if any, would allow the employee to perform the essential functions of the job.
Copyright 2000. This article originally appeared in BIA Update, February 2000.
* Anne Scheer is admitted in New Hampshire.
Return to top of page
Return to Employment Law Articles
Return to Firm Publications
