Vague Benefit Policies Are Risky
By: Dennis Gardiner, Partner | email
Without a clearly written policy, using additional paid time off as a benefit when deciding employee compensation, could put you at risk for a lawsuit.
It’s critical to have a written policy at your company detailing how vacation and paid time off is accrued.
Let’s say you offer paid vacation, paid sick leave, paid time off or paid holidays, and you have no formal policy in place. Legally, you have an implied policy, based on your history of awarding paid benefits in the past — and any verbal or written agreements with individual employees. So if you make a deal with a new employee to get two weeks more annual vacation time than other staff members, that additional time could become part of your “policy” in a lawsuit. A court could decide how much you owe employees.
Note: Your time-off benefit policy should be written in clear language that is easily understood by the typical employee. In some cases, even companies with written polices have been forced to grant employees more benefits than they intended. That’s because their policies had vague or confusing formulas for determining how employees earned and accrued paid time off.