General Business

Handling Vacation & Paid Time Off

Ask the Experts

In the latest installment of New Jersey Business Magazine’s Ask the Experts column, an HR professional working with the New Jersey Business & Industry Association responds to a business owner’s inquiries:

Q: Can we deny vacation requests?

In general, yes. However, you should have – and document – a legitimate business reason for doing so. Denying vacation requests will undoubtedly hurt morale, especially if it happens frequently, and low morale leads to higher rates of turnover.

Discrimination claims are also a risk. Although denying vacation requests for legitimate business reasons will reduce the chance of a discrimination claim, you’ll also want to make sure you’re not denying vacation in a way – even unintentionally – that disproportionately affects employees with the same protected characteristic. For example, if you deny vacation requests from employees in the customer service department – which happens to be mostly women – more than other requests, they might have a gender discrimination claim. We also hear from employers who want to deny vacation requests when the employee is asking for time off for medical procedures or recovery; this clearly raises disability discrimination issues.

The best approach to avoid these types of discrimination claims is to periodically crunch the numbers to see if employees who share a protected characteristic are significantly more likely to have their request denied than others and, if so, adjust your practices accordingly.

When you must deny a request, do so carefully. It’s important to show empathy in these situations. You never know what someone has going on in their life. State the business reason you couldn’t approve the request and work with them to find an alternative time they can take off.

If you find you are regularly denying requests when employees have a vacation planned, we recommend reaching out to an employment law attorney for additional guidance.

Q: Can we give employees different amounts of vacation or PTO time?

If the differing amounts of vacation or PTO are based on a clearly-defined employee groupings, such as seniority, department or exempt versus non-exempt status, then yes. It’s a common practice, for example, for employers to offer more vacation time to employees who have been with the organization for longer.

Where you can run into trouble is offering different amounts of vacation on an individual basis or without clearly-defined criteria, either of which can lead to discrimination claims. For instance, if Rafik and Anita are hired at the same time for similar jobs in the accounting department at the same rate of pay, but the organization offers Rafik more vacation, Anita could potentially bring a claim under federal or state discrimination or pay equity laws.

Q: Can an employer legally make their employees use their accumulated vacation hours?

Yes. An employer can tell an employee that they need to take time off. However, that rarely bodes well for the morale of the employee if they don’t want to take the time off.

Some employers have a “use-it-or-lose-it” policy where any remaining vacation time is lost if unused by a certain date. However, these kinds of policies are not legal in all states. If your state doesn’t allow use-it-or-lose-it, or the employee isn’t willing or able to take off as much time as you would like, you could instead pay them for the hours they’re unable to use.

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