This article appeared in The Boston Globe. Elaine Varelas is Chairman of the Board for Career Partners International and Managing Partner of Keystone Partners.
Q. I will be leaving a job where we use flextime for our time off. All of our days off come from the same pool, be it holidays, sick leave, vacation, etc. I have accumulated nearly 900 hours [about 23 weeks] in my flextime pool. The written company policy is that if I give my employer four weeks’ notice, I am entitled to cash out a maximum of four weeks of flextime.
Is this legal? If not, what kind of recourse do I have to ensure compensation? Can I take the number of hours that I will forfeit by virtue of leaving as a capital loss on my taxes? My effective pay rate is more than $40 an hour. That means I am forfeiting nearly $30,000.
A. Many organizations have moved into paid time off policies that look like yours. Different industry sectors have different practices, and the public sector is one of the last that seems to allow people to cash out all of their accumulated time. Based on taxpayer reaction, we may see a change in this practice soon.
I consulted with David Conforto, an attorney at Conforto Law Group in Boston, who said: “According to an advisory opinion issued by the attorney general’s office, employers should designate the amount of hours or days of the leave that are considered vacation time. Vacation time is afforded special protection and considered ‘wages.’
“The failure to designate which portion of your flextime is vacation could result in all accrued flextime being deemed ‘wages’ under this statute.
“This special protection includes the guarantee of the pay-out of vacation time when you leave a job. But an employer may cap the amount of vacation time an employee may accrue.”
Conforto added, “Regarding the notice issue, the fact that you will lose accrued vacation time if you fail to provide such notice likely violates the wage act.”
A conversation with your human resources benefits staff will most likely shed some light on the dollar value of your flextime.