Is Unused Vacation Protected Like That of Unpaid Wages Under the Louisiana Wage Payment Act?


Paul F. Bell
Bell Law Firm, LLC www.BatonRougeEmploymentLawyer.com


The Louisiana Wage Payment Act requires employers to pay its discharged employees unpaid wages and unused vacation. It was not until 1997, however, that the statute defined when vacation came under the Act’s protections. It and the Louisiana Supreme Court state that vacation is protected if the employee has accrued the right to take vacation time with pay and the employer has not paid employee his unused vacation at termination. Despite that clear language and the Act’s anti-forfeiture provision in La. R.S. 23:634, the 3rd Circuit has declared in Picard v. Vermilion School Board (742 So. 2d 589) that an employer can forgo paying discharged employees their unused vacation provided employer clearly states that the vacation is a mere gratuity. Some courts repeat this statement and even use it in their analyses in wage suits mostly without harm. It is based on a misapplication of the amendment to the Act in 1997 to cases that preceded that enactment.


Other topics to be discussed at the CLE are whether the Wage Payment Act protects paid time off (PTO) and sick leave, when unused vacation is more than that shown on the paycheck stub, and how Louisiana’s wage statute compares with other states’ statutes.


Bibliography

Beard v. Summit Inst. of Pulmonary Med. & Rehabilitation, 97-C-1784, (La. 3/4/98), 707 So. 2d 1233.


Huddleston v. Dillard Dept. Store, 94-53 (La. App. 5th Cir. 5/31/94), 638 So. 2d 383.


Kately v. Global Data Systems, Inc., 05-1227 (La. App. 3rd Cir. 4/5/06), 926 So. 2d 145.


Picard v. Vermilion Parish School Bd., 98-1933 (La. App. 3rd Cir. 6/23/99), 742 So. 2d 589.


Semien v. Geo Group, 10-642 (La. App. 3rd Cir. 12/8/2010) 52 So.3d 1019.


Wyatt v. Avoyelles Parish School Bd., 01-C-3180, 02-C-0131, 02-C-0259, (La. 12/4/02), 831 So. 2d 906.


Gerald J. Huffman, The New Louisiana Employment Statutes: What Hath the Legislature Wrought, 58 La. L. Rev. 1033 (1998) footnote 183.


The Louisiana Wage Payment Act:

La. R.S. 23:631. Discharge or resignation of employees; payment after termination of employment

A.              (1)             (a) Upon the discharge of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday or no later than fifteen days following the date of discharge, whichever occurs first.

(b) Upon the resignation of any laborer or other employee of any kind whatever, it shall be the duty of the person employing such laborer or other employee to pay the amount then due under the terms of employment, whether the employment is by the hour, day, week, or month, on or before the next regular payday for the pay cycle during which the employee was working at the time of separation or no later than fifteen days following the date of resignation, whichever occurs first.

(2) Payment shall be made at the place and in the manner which has been customary during the employment, except that payment may be made via United States mail to the laborer or other employee, provided postage has been prepaid and the envelope properly addressed with the employee's or laborer's current address as shown in the employer's records. In the event payment is made by mail the employer shall be deemed to have made such payment when it is mailed. The timeliness of the mailing may be shown by an official United States postmark or other official documentation from the United States Postal Service.

(3) The provisions of this Subsection shall not apply when there is a collective bargaining agreement between the employer and the laborer or other employee which provides otherwise.


B. In the event of a dispute as to the amount due under this Section, the employer shall pay the undisputed portion of the amount due as provided for in Subsection A of this Section. The employee shall have the right to file an action to enforce such a wage claim and proceed pursuant to Code of Civil Procedure Article 2592.


C. With respect to interstate common carriers by rail, a legal holiday shall not be considered in computing the fifteen-day period provided for in Subsection A of this Section.

 

D.              (1) For purposes of this Section, vacation pay will be considered an amount then due only if, in accordance with the stated vacation policy of the person employing such laborer or other employee, both of the following apply:

(a) The laborer or other employee is deemed eligible for and has accrued the right to take vacation time with pay.

(b) The laborer or other employee has not taken or been compensated for the vacation time as of the date of the discharge or resignation.

(2) The provisions of this Subsection shall not be interpreted to allow the forfeiture of any vacation pay actually earned by an employee pursuant to the employer's policy.

Amended by Acts 1977, No. 317, §1; Acts 1988, No. 602, §1; Acts 1995, No. 325, §1; Acts 1997, No. 56, §1; Acts 2001, No. 1171, §1; Acts 2003, No. 699, §1.


La. R.S. 23:632. Liability of employer for failure to pay; attorney fees

Any employer who fails or refuses to comply with the provisions of R.S. 23:631 shall be liable to the employee either for ninety days wages at the employee's daily rate of pay, or else for full wages from the time the employee's demand for payment is made until the employer shall pay or tender the amount of unpaid wages due to such employee, whichever is the lesser amount of penalty wages. Reasonable attorney fees shall be allowed the laborer or employee by the court which shall be taxed as costs to be paid by the employer, in the event a well-founded suit for any unpaid wages whatsoever be filed by the laborer or employee after three days shall have elapsed from time of making the first demand following discharge or resignation.

Amended by Acts 1964, No. 422, §1; Acts 1977, No. 317, §1.


§633. Payment twice monthly for certain occupations; penalty for violations

A. It shall be the duty of each employer subject to this Section to inform his employees at the time of hire what wages they will be paid, the method in which they will be paid and the frequency of payment along with any subsequent changes thereto. Except as provided under Subsection B of this Section, any employer that fails to designate paydays must pay his employees on the first and sixteenth days of the month or as near as is practicable to those days.


B. Every person, engaged in manufacturing of any kind, or engaged in boring for oil and in mining operations, employing ten or more employees, and every public service corporation, shall make full payment to employees for services performed as often as once every two weeks or twice during each calendar month, which paydays shall be two weeks apart as near as is practicable, and such payment or settlement shall include all amounts due for labor or services performed up to not more than ten days previous to the time of payment, except that public service corporations shall not be required to make payment for labor or services performed up to more than fifteen days prior to the time of payment, provided that, except in cases of public service corporations, this Section shall not apply to the clerical force or to salesmen.


C. For purposes of this Section, the term "employee" does not include any individual employed in a bona fide executive, administrative, supervisory, or professional capacity or any employee considered exempt pursuant to the federal Fair Labor Standards Act.


D. Employers shall post, in the same location where they post other employee notices required by state or federal laws, a notice provided by the Louisiana Workforce Commission that states, as follows:

"Your employer has a duty to inform you at the time of your hire what your wage rate will be, how often you will be paid and how you will be paid, and of any subsequent changes thereto. If your employer should, for reasons within his control, fail to pay you according to that agreement, you must first lodge a complaint with him. If no action is taken to resolve your complaint, you may report the violation to the office of workforce development within the Louisiana Workforce Commission."

E. Whoever violates Subsection A or B of this Section shall be fined not less than twenty-five dollars nor more than two hundred fifty dollars for each day's violation. A second such violation may, in addition to such fines, subject a person to imprisonment of not less than ten days.

Acts 1990, No. 126, §1, eff. July 1, 1990; Acts 2004, No. 601, §1; Acts 2008, No. 743, §7, eff. July 1, 2008.


§634. Contract forfeiting wages on discharge unlawful

A. No person, acting either for himself or as agent or otherwise, shall require any of his employees to sign contracts by which the employees shall forfeit their wages if discharged before the contract is completed or if the employees resign their employment before the contract is completed; but in all such cases the employees shall be entitled to the wages actually earned up to the time of their discharge or resignation.


B. Nothing in Subsection A of this Section or in R.S. 23:631(A) shall prohibit an employer from requiring an applicant for employment who becomes an employee or an employee, provided the employee is compensated at a rate equivalent to not less than one dollar above the existing federal minimum wage and is not a part-time or seasonal employee as defined in R.S. 23:1021, to sign a contract providing that the costs of such individual's preemployment medical examination or drug test may be withheld from his wages if he resigns within ninety working days from his first day of work, and, upon resignation, withholding such costs, unless such resignation is attributable to a substantial change made to the employment by the employer as applied in the Louisiana Employment Security Law.

Acts 1997, No. 1398, §1.


La R.S. 23:§635. Assessment of fines against employees unlawful; exceptions

No person, acting either for himself or as agent or otherwise, shall assess any fines against his employees or deduct any sum as fines from their wages. This Section shall not apply in cases where the employees wilfully or negligently damage goods or works, or in cases where the employees wilfully or negligently damage or break the property of the employer, or in cases where the employee is convicted or has pled guilty to the crime of theft of employer funds, but in such cases the fines shall not exceed the actual damage done.

Acts 2001, No. 768, §1.


§636. Penalty for violations

Whoever violates the provisions of R.S. 23:634 or R.S. 23:635, shall be fined not less than twenty-five dollars nor more than one hundred dollars, or imprisoned for not less than thirty days nor more than three months.