Legal Question in Employment Law in Massachusetts
Who is responsible for vacation when taking over a company
We are a corporation who is taking over 6 of our Franchised locations - all from the same owner. Who is responsible for reimbursement of vacation time of his employees? We would like for him to pay out vacation time prior to the buyout. Each employee would then be considered a new hire with the take over date as their date of hire. Benefits would accrue from there.
Can you please advise?
1 Answer from Attorneys
Re: Who is responsible for vacation when taking over a company
There is a two-part answer to this. The first answer is that your franchisee is primarily liable for the payment of accrued, unused vacation time under the payment of wages statute, G.L. c. 149, s. 148. And, your franchisee should be aware that the statute provides for individual liability for the owner of the company if the company does not pay. Additionally, the statute provides for up to treble damages plus attorney's fees for a failure to pay.
However, if you have maintained control over certain aspects of the employment relationship to date, there is a chance that the parent company could be found to be a joint employer. In such an instance, the parent company could also be held liable under the statute...
Good luck.
Evan
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