According to U.S. wage law, paid time off that employees acquire is not considered a component of their pay. As a result, companies are permitted to revoke paid vacation from salaried employees who fail to reach productivity benchmarks.
By deducting salaried employees’ paid time off, or PTO, when they failed to complete the minimum weekly hours, Bayada Home Health Care Inc. did not violate federal wage law, according to a unanimous decision by a three-judge panel of the 3rd U.S. Circuit Court of Appeals in Philadelphia.
The question of whether paid time off is considered part of an employee’s wage was put to a U.S. appeals court for the first time in this particular case. The issue is crucial because salaried employees may be entitled to overtime pay if their employers deduct payments from their paychecks. In contrast to paid time off, which is a fringe perk that doesn’t affect a worker’s wages and might be paid irregularly, such as when an employee leaves a company, a salary is a defined amount of compensation that is paid out at regular intervals, according to the 3rd Circuit panel.
Bayada, situated in New Jersey, employs over 28,000 people and conducts business in 23 states. A request for a response from the company’s attorneys was not immediately complied with. Neither did plaintiffs’ attorneys.
In 2016, several Bayada staff members, including nurses, PTs, and social workers, filed a lawsuit against the business in federal court in Scranton, Pennsylvania. The verdict supported a federal judge’s decision from 2021 that gave Bayada summary judgment.
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