Topic:

Can an Employer Change Vacation Policy Without Notice?

September 23, 2015
Can an Employer Change Vacation Policy Without Notice?

While you aren't required to notify employees in advance when changing your paid time off (PTO) policy, it's best to do so.

Check Your State Laws

Though federal law doesn't require PTO, certain state laws do weigh in on the matter. So, first check with your state to make sure the change complies with any local laws.

For example, if you are an employer in California, where state laws consider employees' PTO to be a form of wages, you can't change your policy in such a way that takes away PTO hours that have already been accrued.

Notify Your Employees

Even though you aren't technically required to notify your employees of a PTO policy change in advance, it's a best practice to do so. Consider the possible impact on employees' morale, finances, and future plans.

Say, for example, you previously allowed unlimited PTO, and an employee planned and paid for a trip to Europe for three weeks. If you then change your PTO policy from unlimited to two weeks, the employee won't be paid for the third week and might have to shorten their trip.

Conclusion

Being transparent about your policy changes allows employees to adjust their plans for the future and lets them know that you, as their employer, care how company decisions impact their lives.

Helpful Links:

Providing Vacation and Sick Leave - nolo.com

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