Mark Pestronk
Mark Pestronk
Q: I require my frontline agents to give at least two weeks' notice before they quit, and I insist that my managers give at least 30 days' notice, as it takes a long time to fill vacancies with qualified people. However, some employees don't follow these requirements, especially when they get a job offer from an employer that wants them to start right away. Can I legally refuse to pay employees who don't give the required notice? If not, can I refuse to give them accrued vacation pay, sick pay, familiarization trip pay or bonuses that they would have gotten if they had worked for the entire notice period? Can I delay any required payment until I am sure that the departing employee didn't hurt us by transferring bookings to his new employer?

A: Let's take the easiest question first: under the federal Fair Labor Standards Act (FLSA), you cannot refuse to pay wages or salary for time worked, so you cannot refuse to pay employees just because they leave without the required notice.

An employee's right to be paid for time worked is not waivable in a contract. So, it would not do any good to have your employee sign a contract under which he agreed to forego basic pay. Even with such a contract, the courts and the U.S. Labor Department would require you to pay.

You also cannot delay the employee's final check. Although the FLSA does not require prompt payment, 46 states require that the final check be sent by a specific deadline, which varies from 72 hours to a few weeks after the last day of employment.

With respect to vacation and other accrued pay for time off, federal law is silent, so whether you can withhold depends on state law. If you and the ex-employee live in different states, the law of the employee's state of residence would govern.

In most states, accrued time-off pay of any type is viewed as discretionary, which means that you can probably refuse to pay it. However, some states do require payment, so check the requirements of the employee's state at that state's labor or employment department website.

For example, under California law, when employment ends for any reason whatsoever, the employer must pay the employee at his or her final rate of pay for all of his or her accrued but unused vacation time. Oddly, California does not have the same requirement when it comes to accrued sick leave or any other time-off accruals.

When it comes to bonuses, you also have discretion to refuse to pay an ex-employee who left before the time you paid any bonus, such as a productivity or Christmas bonus. If an employee leaves on the day before you pay the bonuses, you are free to exclude him.

The exception to all this discretion is that you are required to pay for all accrued time and bonuses if such payment has been your consistent policy in other cases of termination without the required notice, as such a policy forms an implied contract with the employee.

Speaking of employment contracts, you could have a contract that expressly states that you will not pay any discretionary accruals or bonuses if the employee did not give the required notice, as long as the employee's state law allows such nonpayment. Such a contract may deter at least some employees from leaving without the required notice.

Contracts are better than mere written policies or employee handbooks, as it is usually fairly easy for an employment attorney to attack a policy or a handbook as not binding on the employee.
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